How one bear is raising bet against Boyd

By
A A A

Boyd Gaming reports earnings tomorrow morning, and one bear is upping the ante.

Our Depth Charge tracking program detected activity in the May 10 puts, where 3,000 contracts changed hands for $0.95 and the June 10 puts, where 4,400 contracts went off for $1.25. It appears the May 10s were sold and the June 10s were purchased.

This suggests that an investor rolled a position from one month to the next and increased its size. The trade cost a net $265,000 and increased downside exposure because the position has more time for a move and more contracts. The strategy is also interesting because it uses in-the-money options, which increases leverage to small moves. (See our Education section)

BYD rose 0.89 percent to $9.02 in early afternoon trading. The Las Vegas-based casino operator has struggled because of its concentration in the U.S. and its lack of exposure to faster-growing markets such as Macau. It's down 19 percent in the last three months, in contrast with a 41 percent gain for Asian upstart Melco Crown Entertainment.

BYD's reported a wider-than-expected loss and weaker-than-expected revenue on March 1. The shares have been attempting to hold support around $9 and had significant short interest at 29 percent of the float in mid-April.

Overall option volume in the stock is 6 times greater than average so far today, with puts outnumbering calls by 8 to 1, according to the Depth Charge.



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

Copyright © 2010 OptionMonster® Holdings, Inc. All Rights Reserved.


This article appears in: Investing , Options

Referenced Stocks: BYD , MPEL

optionMONSTER

optionMONSTER

More from optionMONSTER:

Related Videos

Budgeting for Baby
Budgeting for Baby                  
A Home to Retire In
A Home to Retire In                 

Stocks

Referenced

Most Active by Volume

77,771,438
  • $16.87 ▼ 1.06%
62,273,674
  • $13.325 ▼ 6.10%
51,666,631
  • $76.68 ▼ 2.99%
49,985,084
  • $14.63 ▼ 1.08%
49,786,735
  • $3.43 ▼ 1.72%
48,087,628
  • $97.38 ▼ 1.43%
45,775,000
  • $99.40 ▼ 1.34%
38,885,744
  • $25.045 ▼ 0.50%
As of 10/1/2014, 03:49 PM

Find a Credit Card

Select a credit card product by:
Select an offer:
Search
Data Provided by BankRate.com