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Short-term wagers placed on Melco Crown

optionMONSTER Staff (media-support-team@optionmonster.com)

Melco Crown Entertainment has fallen sharply in recent months, but traders are looking for a bounce by the end of next week.

optionMONSTER's monitoring system detected the purchase of 5,000 Weekly 13 calls expiring on Aug. 5 for $0.35 to $0.41. Volume surpassed open interest of 1,860 contracts, an indication new money was put to work.

Long calls lock in the price where investors can buy stock, allowing them to profit from a rally with limited capital at risk. Their cheap cost can also generate significant leverage on a percentage basis if shares move in the right direction. (See our Education section)

MPEL is up 0.98 percent to $12.86 in afternoon trading but is down 18 percent in the last three months. The casino operator is expected to announce quarterly results in pre-market hours on Aug. 4.

Overall option volume in MPEL is twice its daily average today. Calls outnumbered puts by a bullish 177-to-1 ratio.

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