This is a rebroadcast of OICs webinar panel. In this deep dive discussion, Frank Fahey (representing...
Options Straddle Idea for Las Vegas Sands Corp. (LVS)
04/22/2010 12:01 am EST
Las Vegas Sands Corp. (LVS) has not confirmed its next earnings announcement, but the market anticipates the report during the first week of May. Last quarter, the stock dropped 9% around its earnings announcement.
The quarter prior, the shares climbed 12% around earnings time. Do you think the stock will make at least that much again, but not sure which direction? Consider a long straddle from ONN.tv’s Idea Generating Platform (IGP) in the front month.
LVS Straddle Trade Details (at time of writing – adjust accordingly):
LVS is currently trading around $24.05
• Buy the May 24 call
• Buy the May 24 put
• Net debit of $3.10
Maximum Profit: Maximum gain on this long straddle is theoretically unlimited if the stock climbs higher than $27.10, and is limited to the downside (but significant) if the stock drops to zero throughout the next 30 days.
Maximum Risk: Risk is limited to the premium paid, or $3.10 per straddle, if volatility comes in and the shares trade between the breakevens at May options expiration.
Upper Breakeven: $27.10 (the strike price plus the credit paid).
Lower Breakeven: $20.90 (the strike price minus the credit paid).
By the Staff at ONN.tv
Provided by the Idea Generating Platform at ONN.tv
Related Articles on OPTIONS
Roma Colwell-Steinke of CBOEs Options Institute joins Joe Burgoyne in a conversation about strategy ...
This is a rebroadcast of OIC’s webinar panel where you can take a deep dive into options Greek...
Host Joe Burgoyne answers listener questions about mini-options and investor resources. Then on Stra...