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Tuesday, September 15th, 2009
1:25pm (EST)
Casino stocks are getting another pop and I wanted to update a trade that profiled back in June. This trade was from June and was before our “official” launch so many of you new subscribers have not seen this one. DO NOT take this update as a new trade. In fact, it is being updated and closed today.
We have a lot of new faces and I wanted to walk everyone thru the trade to get a feel on how I look at things.
From June 24th:
“I’ve been talking about creating Watch Lists as a way to help you follow stocks and sectors. The Gambling/ Casino sector has been hit pretty hard and some of the star players in the industry are in the single-digits.
I like MGM the most out out of this group and just last July this was a $40 stock. Yes, we have a long way to go and sometimes I like to think outside the box. Yes, the sector has been punished and we all know MGM is not a $42 stock right now nor does it deserve to trade at that high of a multiple. However, it is dirt cheap.
This is not a trade recommendation but the July 6 calls (MGMGF, $0.95, up $0.45) are up over 50% today. What I’m LOOKING at are the January 2011 January 7.50 calls (VYGAU, $2.60, up $0.40) which do not expire for another 576 days! Folks, that is over a year-and-a-half away. I normally don’t buy LEAPs but here is one case where it might be worth a nibble. If MGM can make it to $20 by 2011, these calls will be worth at least $12.50.
Sometimes it is hard to keep you eye on the prize but a trade like that makes sense to me. Let’s say you are just starting options trading and you don’t have that much money to trade. If you had just $260 you could buy one contract of these call options and if MGM is at $20 by 2011 then you will have $1,250. That is what I mean when I say I’m “thinking outside the box”. (END)
Here was the Casino Watch List from June 24th as well:
“For this Watch List, you should include: Las Vegas Sands (LVS, $7.81, up $0.44), MGM Mirage (MGM, $6.56, up $0.72) and Wynn Resorts (WYNN, $35.28, up $1.29) are the main ones I watch. You could also add Boyd Gaming (BYD, $8.30, up $0.25) and Pinnacle Entertainment (PNK, $9.38, up $0.03).” (END)
Today’s stock prices: LVS, $19.22, up $1.16; MGM, $13.05, up $0.71; and WYNN, $71.06, up $1.95. Wow.
The MGM 2011 January 7.50 calls (VYGAU, $7.50, up $0.70) were at $2.60 and are up nearly 190%. Close at least half of the trade and set a stop of $5.20 on the other half.
I wanted to bring this up because it shows the importance of using these Watch Lists as a way to help you find and set up trades. Look, I get a lot of emails asking how I find trades and the best way I can explain is to create these Watch Lists. Once you see where the money is flowing you can go long (buy call options) in the sector that is hot or short (buy put options) the sector that is falling out of favor.
The market is holding its own…the Dow is up 43 to 9,670. The market is still following the road map we have sketched out over the short-term…
Rick@MomentumOptionsTrading.com
Tags: Boyd Gaming, Las Vegas Sands, MGM Mirage, options picks, options trading strategies, Pinnacle Entertainment, Wynn Resorts
Posted in Hot Stocks, Option Trades | Comments Off
Wednesday, June 24th, 2009
10:45am (EST)
I’ve been talking about creating Watch Lists as a way to help you follow stocks and sectors. The Gambling/ Casino sector has been hit pretty hard and some of the star players in the industry are in the single-digits.
These stocks are getting a lift today and I was just thinking yesterday that they were getting “attractive” again. I’m not ready to go long the sector although I got some interesting ideas.
For this Watch List, you should include: Las Vegas Sands (LVS, $7.81, up $0.44), MGM Mirage (MGM, $6.56, up $0.72) and Wynn Resorts (WYNN, $35.28, up $1.29) are the main ones I watch. You could also add Boyd Gaming (BYD, $8.30, up $0.25) and Pinnacle Entertainment (PNK, $9.38, up $0.03).
I like MGM the most out out of this group and just last July this was a $40 stock. Yes, we have a long way to go and sometimes I like to think outside the box. Yes, the sector has been punished and we all know MGM is not a $42 stock right now nor does it deserve to trade at that high of a multiple. However, it is dirt cheap.
This is not a trade recommendation but the July 6 calls (MGMGF, $0.95, up $0.45) are up over 50% today. What I’m LOOKING at are the January 2011 January 7.50 calls (VYGAU, $2.60, up $0.40) which do not expire for another 576 days! Folks, that is over a year-and-a-half away. I normally don’t buy LEAPs but here is one case where it might be worth a nibble. If MGM can make it to $20 by 2011, these calls will be worth at least $12.50.
Sometimes it is hard to keep you eye on the prize but a trade like that makes sense to me. Let’s say you are just starting options trading and you don’t have that much money to trade. If you had just $260 you could buy one contract of these call options and if MGM is at $20 by 2011 then you will have $1,250. That is what I mean when I say I’m “thinking outside the box”.
One interesting tidbit I have been hearing but need to do more research on is something I heard the other day. There seems to be a lawsuit concerning sports betting that would allow all 50 states rights the right to allow it or not. Can you imagine if this is ever approved? I don’t think it is a good idea because I think it would change sports and the way people would view the games. It will probably never happen anyway but this is news that could surface in the near future.
Rick Rouse
Rick@TheOptionInvestor.com
Tags: Las Vegas Sands, MGM Mirage, Wynn Resorts
Posted in Company Commentary, Watch Lists | No Comments »
Thursday, May 7th, 2009
9:20am (EST)
The financials stocks rallied yesterday and one particular trade we had on our Watch List was a play on Bank of America (BAC, $12.69, up $1.85). The stock gained 17% but the June 13 calls (BYOFM, $1.72, up $0.78) soared 83%. I mentioned they could have a “huge” day and they opened at $1.15. Nearly 20,000 contracts traded hands and these calls were hot all day. They briefly touched a low of $1.10 and a high of $1.80. These calls should zoom again today as the stock is up to nearly $15 in pre-market trading!
Las Vegas Sands (LVS, $10.25, down $1.09) fell below $10 on Wednesday which was something we were keeping an eye on as well. It would have been a bold move to pick up the June 15 calls (LVSFZ, $0.55, down $0.50) which fell nearly 50% and traded as low as 35 cents but judging by the option activity, we had a few takers. If you bought at the lows then some traders made 50% by the close. A run back above $1 is a 100%+ return.
MGM Mirage (MGM, $11.78, down $1.02) didn’t make it below $10 but the June 15 calls (MGMFC, $0.95, down $0.40) dropped 30% and fell to a low of 85 cents. I wouldn’t jump into both positions if there is another pullback and would close half the position if Las Vegas Sands bounces back today and you squeeze 100% out of it.
We have to say goodbye to Marvel Entertainment (MVL, $32.95, down $0.07) for the time being. I love covering the options on this stock because they have done well for us over the past couple of years since I started here at OptionsMentoring.com. This time around we rode the June 30 calls (MVLFF, $3.80, down $0.20) for monster gains. I recommended the call options in the blog on April 23 when they were going for $1.05. After selling half at $2.10, we rode this magic carpet for a nice 300% gain and had set stops at $4.00.
Marvel could still get to $35 but our stop was hit. Although the trade is over, I can’t wait to check out the new Wolverine movie this weekend. Should be a classic, right Mr. Schuler?
Rick Rouse
Rick@OptionsMentoring.com
Tags: Bank of America, Las Vegas Sands, Marvel Entertainment, MGM Mirage, options blog
Posted in Option Trades, Rick's Account | No Comments »
Wednesday, May 6th, 2009
9:00am (EST)
I spent much of yesterday just catching up on news that I missed and getting a feel for the market. The casino stocks look like their hair has caught fire (again) and we played these names back in the beginning of April for about a week. We made triple-digit profits on a few plays and it looks like we took profits early in the May call options, but like I said, these stocks just started rallying last Friday.
Las Vegas Sands (LVS, $11.34, up $1.84) was up 20% on Tuesday and has surged from $7.82 in three trading days. The May 10 calls (LJJEB, $2.10, up $1.30) were up 160% after opening at $1.40 yesterday. The strength was strong from the opening bell and if you surfed the wave again, good for you. On April 3rd, the May 5 calls (LJJEA, $6.40, up $1.95) were going for 65 cents and my famous last words were…”They could be a bargain if LVS is headed back above $5″. That looks like a “10-bagger” as Wall Street would put it.
Wynn Resorts (WYNN, $49.98, up $7.17) added 17% and the May 45 calls (UWYEI, $6.30, up $4.05) zoomed 180%. Unbelievable. And my other favorite casino stock, MGM Mirage (MGM, $12.80, $3.36) jumped 35%. The May 12.50 calls (MGMEV, $1.44, up $1.16) gained an astounding 400% after opening at 45 cents. Holy Smoke!
So why the rally? After all, two of the three companies just reported earnings that were worse than what Wall Street had forecast. Las Vegas Sands beat expectations. Still, you can put lipstock on a pig and it is still a pig. Things are still “brutal” as one of the CEO put it.
Wynn’s option chains are pretty expensive so lets see if we can get our feet wet with MGM and Las Vegas Sands. The MGM June 15 calls (MGMFC, $1.35, up $1.00) and the LVS June 15 calls (LVSFZ, $1.05, up $0.69) had huge moves yesterday so obviously we won’t be throwing down the rent money on these plays today. However, we can add them to our Watch List and see where they are next week. I would like to see both stocks fall back below $10 before even thinking of a position but that might be asking too much. If we get the pullback, we will have to check the chart to see where we are at. Bottom Line. Wait for a pullback.
On that note, I always use charts for most everything when looking at trades and this art alone will help you immensensly in your options trading. As many of you know, I’m working on an option trading manual but the stock part of the course is ready and it teaches you the technical trading that you will need to become a better options trader. The course is available by going here and you get lifetime mentoring. Folks, you can’t beat that with a stick.
The directional stock moves that occur in the market today are contained within this comprehensive manual and is the key to learning chart work. After all, a chart is a chart. Once you know how to read and understand exactly how stocks trade then you will open up another universe in your option trading opportunities.
If you are interested in learning more, send me an email.
The market is looking to open higher after Walt Disney (DIS, $23.15, up $0.29) beat estimates. Bank of America (BAC, $10.84, up $0.46) is getting some early action on the heels of the stress test results which are due Thursday. Watch the Bank of America June 13 calls (BYOFM, $0.95, up $0.05) this morning. They could have a huge day.
Rick Rouse
Rick@OptionsMentoring.com
Tags: Bank of America, Las Vegas Sands, MGM Mirage, Walt Disney, Wynn Resorts
Posted in Hot Stocks, Sectors | 1 Comment »
Tuesday, April 7th, 2009
9:00 am (EST)
I had a busy day on Monday with everything going on but I wanted to update some of the positions we have open and what is happening with them.
The Celgene (CELG, $42.31, up $0.16) April 40 calls (LGHDH, $3.00, up $0.25) had a stop of $2.25-$2.50 and the calls traded as low as $2.30. These options were profiled at 80 cents and we closed half of the position on Friday at $2.80. If you had a “loose” stop and are still in the other half of the trade, then set a firm stop at $2.70. Half of the May 40 calls (LGHEH, $4.40, up $0.20) were closed at $4.20 and stops were set at $3.50. Raise them to $3.90.
Las Vegas Sands (LVS, $4.96, up $0.48) came out of the opening bell like a bat out of hell as the stock zoomed to a high of $5.21 shortly after 10am yesterday. We ended off the highs of the day but the April 5 calls (LJJDA, $0.48, up $0.18) closed for a nearly a double from our entry price of 25 cents. I had a target of 50 cents on them and they actually opened at 25 cents and hit a high of 65 cents. The May 5 calls (LJJEA, $1.00, up $0.15) were profiled at 65 cents and traded as high as $1.20. The exit target is $1.30.
Profits could have been taken and on either one of these positions and if you didn’t take them, be careful. Casino stocks are getting some Wall Street love right now as MGM Mirage (MGM, $5.53, up $0.88) and Wynn Resorts (WYNN, $31.20, up $1.55) are also rising. If the trades get “crowded”, sell them if it looks like you might be giving back profits.
And last, but certainly not least, Dendreon (DNDN, $6.58, up $0.59) was up another 10% and traded as high as $7.35 yesterday. I heard whispers that the “sell, sell, sell..” button was stuttering on the tube last night and I was afraid that once Dendreon got “hot” this would happen. We were in this trade like cotton on sheep back in late March, and, so far things have gone according to plan.
The April 10 calls (UKODB, $0.45, down $0.10) hit a high of 90 cents on Monday after trading to $1.05 on Friday. I said we had to be careful with these on Sunday night because they expire next week. And, the market is closed Friday. The call options did double once again from our entry price but I’m still holding.
Despite the nay-sayer’s, I still think we get an announcement sooner rather than later. I might run the April 10′s in the ground meaning this is still an all or nothing trade and I could crash and burn with them. The problem is not knowing when the announcement is coming. As we get closer to Thursday though, I may change my mind on the April calls if the position is profitable.
I’m not too worried with the May 7.50 calls (UKOEU, $2.40, up $0.35) as I am with the April call options. The May 7.50′s have plenty of time to mature. Either they are going to be worth a whole lot more or less than a quarter. These call options were profiled at $1.50 and have held steady since they were mentioned.
Dendreon could be on to something (again) and all signs are pointing that the test results are going to be positive. It’s kind of like Dendreon has the Provenge present and is putting it under the tree. All the FDA has to do is wake-up and unwrap it.
Rick Rouse
Rick@OptionsMentoring.com
Tags: Celgene, Dendreon, Las Vegas Sands, MGM Mirage, Wynn Resorts
Posted in Market Analysis, Option Trades | No Comments »
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Watch List – Gambling, Casino Stocks
Wednesday, June 24th, 2009
10:45am (EST)
I’ve been talking about creating Watch Lists as a way to help you follow stocks and sectors. The Gambling/ Casino sector has been hit pretty hard and some of the star players in the industry are in the single-digits.
These stocks are getting a lift today and I was just thinking yesterday that they were getting “attractive” again. I’m not ready to go long the sector although I got some interesting ideas.
For this Watch List, you should include: Las Vegas Sands (LVS, $7.81, up $0.44), MGM Mirage (MGM, $6.56, up $0.72) and Wynn Resorts (WYNN, $35.28, up $1.29) are the main ones I watch. You could also add Boyd Gaming (BYD, $8.30, up $0.25) and Pinnacle Entertainment (PNK, $9.38, up $0.03).
I like MGM the most out out of this group and just last July this was a $40 stock. Yes, we have a long way to go and sometimes I like to think outside the box. Yes, the sector has been punished and we all know MGM is not a $42 stock right now nor does it deserve to trade at that high of a multiple. However, it is dirt cheap.
This is not a trade recommendation but the July 6 calls (MGMGF, $0.95, up $0.45) are up over 50% today. What I’m LOOKING at are the January 2011 January 7.50 calls (VYGAU, $2.60, up $0.40) which do not expire for another 576 days! Folks, that is over a year-and-a-half away. I normally don’t buy LEAPs but here is one case where it might be worth a nibble. If MGM can make it to $20 by 2011, these calls will be worth at least $12.50.
Sometimes it is hard to keep you eye on the prize but a trade like that makes sense to me. Let’s say you are just starting options trading and you don’t have that much money to trade. If you had just $260 you could buy one contract of these call options and if MGM is at $20 by 2011 then you will have $1,250. That is what I mean when I say I’m “thinking outside the box”.
One interesting tidbit I have been hearing but need to do more research on is something I heard the other day. There seems to be a lawsuit concerning sports betting that would allow all 50 states rights the right to allow it or not. Can you imagine if this is ever approved? I don’t think it is a good idea because I think it would change sports and the way people would view the games. It will probably never happen anyway but this is news that could surface in the near future.
Rick Rouse
Rick@TheOptionInvestor.com
Tags: Las Vegas Sands, MGM Mirage, Wynn Resorts
Posted in Company Commentary, Watch Lists | No Comments »