The casino bulls targeted Boyd Gaming yesterday, barely a week after Pete hit the jackpot in Caesars Entertainment.
optionMONSTER's monitoring program detected the purchase of almost 5,000 April 8 calls against open interest of 3,282 contracts. Buyers initially paid $0.45 to $0.55, but then BYD advanced and the premiums climbed as high as $0.86.
Calls lock in the price where investors can buy shares, so they can generate significant leverage from even a modest move in the underlying stock price. They can also predict direction because they reveal the intentions of big-money players. That's exactly what happened yesterday!
BYD was up barely 1 percent when we first flagged the activity, and then surged more than 8 percent before pulling back. It closed at $8.66, a gain of 5.74 percent. The stock has been running higher in the last month, propelled by hefty short interest and a surge of bullish activity in the casino industry .
Total option volume was almost 5 times greater than average in BYD yesterday, with calls accounting for more than three-quarters of the total.
Pete cited unusual activity in CZR earlier this month as investors bought the April 20 calls. The stock kept powering higher after his alert and those contracts more than doubled in value!
(A version of this post appeared on InsideOptions Pro on Wednesday.)
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