A Possible 456% Winner From This Gambling Stock

The 50 puts were sold to help finance the call spread (reduce the cost). It also implies that the strategists who made the trade doesn’t think LVS will drop below $50 prior to June 4. (The position starts to lose money below $50.) In addition, if the stock doesn’t climb above $57, the premium paid ($0.54) can be lost.

The trade makes money from a stock price of $57.54 up to $60 at expiration. Max gain is $2.46 if LVS closes north of $60 on expiration day. That works out to 456% gains. In total dollar terms, the trader spent $945,000 with a chance to make $4.3 million max.

While the upside is clearly attractive, the downside risk of this trade can be extreme if the stock plunges. This isn’t the sort of trade you want to make if you’re not an experienced trader. Instead, sticking to the 57-60 call spread is a perfectly reasonable replacement, with far lower risk.

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