Unusual Options Activity in IGT, DKNG, LVS

August 24, 2021

Casino and online apps

The Casino names are seeing a lot of action this week. After a big drop, names like LVS, WYNN, MGM, MLCO are coming alive again. Of course, you’re still seeing a lot of money pouring into the sports gambling apps. 

The charts are looking interesting… and the near-term options flow is looking for a big move higher.

I’ll let you decide.

Here's 3 trades in the Casino space worth looking at today:

UNUSUAL OPTIONS ACTIVITY

1. Like the Online Betting Trend? Look at THIS Stock! 

2. What Does Your Crystal Ball Say?

3. This Stock Lives or Dies With Macau

Let’s get started...


UNUSUAL OPTIONS ACTIVITY IGT

Like the Online Betting Trend? Look at THIS Stock! 

Wheel of fortune

IGT provides slots and gaming technology for the casinos. If you’ve been to any casino, you’ve seen their games. In general, I don’t play slots, but I admit to playing their biggest game “Wheel of Fortune.” 

They tend to have revenue shares on these games, which makes IGT tied to the health of the casinos.

If they do well, IGT does well.

So, it makes sense that IGT's stock price has struggled lately with the casino stocks. However, there seems to be a bright spot for the bulls…
IGT Stock Chart 082421

This MACD Diversion (see arrows) is a good sign. It also happens right at the point where the stock took off in early May.

As for the unusual options activity in IGT…

IGT Unusual Options Activity 082421

Over the last few months there’s been a large player in International Game Technology (IGT) options. He’s shuffling things around today.

The IGT November $19 - $23 Call Spreads were sold and rolled up to the $21-$26 Call Spreads. This took a little money off the table with the stock up this morning.

Earnings are on November 10th.

Keep in mind, one of the products they make is a white label online betting technology platform. Basically, it allows any casino to open their own Online Betting App in about… 8 minutes. Take a look HERE.

It’s part of the reason I am not a big fan of the next stock…


UNUSUAL OPTIONS ACTIVITY DKNG

What Does Your Crystal Ball Say?

DKNG Trade Idea

DraftKings is at the center of one of the hottest trends, which by definition makes it a hard stock to short. Their recent deal with Golden Nugget Online Gaming has Wall Street excited and DKNG continues to invest in the company's marketing machine.

Susquehanna’s take a couple of weeks ago highlights their efforts:

“We also think DKNG has more or less cornered the market over the past year on sponsorships/ partnerships which we estimate will allow them greater marketing scale over time (locking up ad inventory for years and avoiding ad inflation going forward).”

As an app and a customer, this gives everyone a good feeling. The question for the stock is and will always be: “What price do you pay today for the potential growth?”

When you pay 20-25x Sales, you need a crystal ball into the future. 

Here’s the chart…

DKNG Stock Chart 082421

The chart doesn’t look bad with the 50 dma turning up and the 200dma grinding higher.

Does it get back to the $74 highs???

Options are active…

DKNG Unusual Options Activity 082421

The highest options volumes are in the near-term Weekly Options where I am seeing profit taking and rolling up for a breakout. 

Someone’s crystal ball is having them roll up their long (failed) puts. The DKNG January $35-$55 Put Spreads were bought 4,000x for about $6.90.  Maybe they see IGT’s technology platform (and they aren’t the only ones) in the hands of every casino, blogger, vlogger, website owner, etc… etc.

Who cares about fundamentals, right? 


UNUSUAL OPTIONS ACTIVITY LVS

This Stock Lives or Dies With Macau

Macau

LVS and the casinos finally got some good news out of Macau yesterday. “Good” but certainly not great news: 

“According to brokerage Bernstein’s weekly channel checks, average daily GGR increased from MOP$78 million to MOP$120 million (US$10 million to US$15 million) during the most recent week, aided by the gradual relaxation of travel restrictions across mainland China. Visitation from 14 to 18 August was also up 168% on the week from 6 to 12 August although still down 42% from July’s daily average.”

Remember, for these stocks to explode higher there needs to be a full opening in Macau. No one is expecting that until next year. 

That said, the chart is interesting.

LVS Stock Chart 082421

It looks like a nice MACD diversion forming here in August. You can see the MACD is higher here than on the previous Low Price in early August.

Volume at last week’s low was also very high.

That’s a decent sign. 

LVS Unusual Options Activity 082421

On today’s move higher, LVS is seeing profit taking in the near-term. For example, the LVS September $40 & $42 calls were sold and rolled into the $45 Calls.  

The September $45 Calls are interesting because they’ve been accumulated over the last two weeks. It appears to be the same Large Call buyer rolling down over the last several months.

Is this the big turn?

Remember, LVS has very little business without Macau. 

Maybe they’ll join every other casino into online gambling?

The CEO seems like he wants in.

Now go make some money!

Best,
Felix

THIS IS HOW THE TOP 1% TRADE OPTIONS

The Most Controversial Options Video

that the Experts Don't Want You to See!

Voted Top Presenter at the Benzinga Options Conference

Options Trading Tutorial - The Greeks Don't Matter

WHAT YOU MISSED

RECOMMENDED FOR YOU

DISCLAIMER
Options are not suitable for all investors as the special risks inherent to options trading may expose investors to potentially rapid and substantial losses. Options involve risks and are not suitable for everyone. Prior to buying or selling options, an investor must receive a copy of Characteristics and Risks of Standardized Options. Copies may be obtained by contacting your broker, The Options Industry Council at One North Wacker Drive, Chicago, IL 60606.

Felix Frey and OptionsGeek, LLC. are not registered as an investment adviser nor a broker/dealer with either the U.S. Securities and Exchange Commission or any state securities regulatory authority. All users of this Content and/or website must determine for themselves what specific investments to make or not to make and are urged to consult with their own independent financial advisors with respect to any investment decision. The viewer bears responsibility for his/her own investment research and decisions, should seek the advice of a qualified securities professional before making any investment, and investigate and fully understand any and all risks before investing. All opinions, analysis and information included on this Content and website are based on sources believed to be reliable and written or produced in good faith, but should be independently verified, and no representation or warranty of any kind, express or implied, is made, including but not limited to any representation or warranty concerning accuracy, completeness, correctness, timeliness or appropriateness. In addition, Felix Frey and OptionsGeek, LLC. undertake no responsibility to notify such opinions, analysis or information or to keep such opinions, analysis, or information current. Also be aware that owners, employees, writers, or producers of and for OptionsGeek, LLC. may have long or short positions in securities that may be discussed in this Content or website. Felix Frey and OptionsGeek, LLC.and the principals and/or employees of OptionsGeek, LLC. may hold securities of companies mentioned in this Content. Neither Felix Frey nor OptionsGeek, LLC. is receiving any compensation from any company referenced in the Content. Past results are not indicative of future profits.