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• Bears target Penn National Gaming
• Top 10 list of unusual option activity
• Penn National trader bets on no news

• PENN 100% Rate It

Penn National Gaming reports earnings tomorrow morning, and one trader is betting that it will be a yawner.

optionMONSTER's tracking systems detected the sale of 1,450 August 40 puts for $1.35 and an equal number of August 40 calls for $1.65. Volume was more than 30 times open interest in both strikes.

The transaction resulted in a credit of $3, which the investor will get to keep if PENN closes at $40 on expiration. Gains will erode to the upside or downside, and turn to losses below $37 or above $43.

Known as a straddle, the strategy is a common way to bet on lower volatility because if earnings are uneventful, premiums will fall for both the calls and puts. (See our Education section)

PENN rose 1.13 percent to $40.38 yesterday. The gambling company is up 15 percent so far this year, outpacing the performance of other big U.S. casino operators like MGM Resorts International and Boyd Gaming.

Earnings and revenue beat forecasts the last time it issued results on April 21 and management raised full-year guidance. (See last week's What's the Trade? column for more about positive employment trends in the gaming sector.)

Overall options volume in PENN was 19 times greater than average yesterday.

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