Short-term bets pay off big in MGM

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Traders hit the jackpot in MGM Resorts this week.

On Monday , our tracking programs lit up with unusual activity in the short-term Weekly 12 calls. This was a pure fast-money trade, with just four sessions before the clock ran out. They bet just $0.04 to roll the dice, and it paid out in spades today as MGM made its move.

The stock gapped higher at the open this morning and is up 5.67 percent to $12.30 in afternoon trading. But that gain in the share price is chump change compared with the return on the options.

Those same Weekly calls are now trading for $0.32, a gain of 700 percent from one session to the next--not a bad way to start the New Year. (A few traders were lucky enough to take profits at $0.39, a gain of almost 900 percent.)

Option volume remains heavy in MGM today, with more than 43,000 contracts versus the 12,500 average in a typical session. But the activity is dominated by puts, making it much less bullish. It looks like the money has been made in this name for the time being.



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: MGM

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