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Bulls hail Caesars Entertainment

Traders rolled the dice on Caesars Entertainment early today, and it's paying off so far.

optionMONSTER's Heat Seeker monitoring program detected the purchase of 2,000 August 16 calls for $1.20, all of which priced in the first 20 minutes of trading. Volume dwarfed previous open interest of 27 contracts, which indicates that new money was put to work on the long side.

Long calls lock in the price where a stock can be purchased, which lets investors profit from a rally. They can also generate significant leverage if shares move in the right direction. (See our Education section)

CZR stood $16.32 when the options hit, then proceeded to work its way higher. The stock is up 4.78 percent to $17.09 in afternoon trading, and those August 16 calls already inflated to $1.60.

The debt-laden casino operator has reported weaker-than-expected earnings for at least four straight quarters but is attempting to bounce around the same level where it bottomed last November. Management is seeking ways to manage its liabilities, including a swap of equity for debt.

Short interest represents 20 percent of the float, which could draw forced buyers in the name. The next earnings report will probably come out before the end of July, according to last year's timetable.

Total option volume is more than twice the daily average, with calls outnumbering puts by about 5 to 1.

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

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

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