Dykstra: IGT's Options Are No Gamble

Gambling's all about rolling the dice, but a trade on the biggest name in the gambling industry is no gamble at all.

International Game Technology(IGT), the world's largest manufacturer of casino gaming machines, garners half its revenue from selling slot machines, and it is the biggest and best company in this sector.

Reno, Nev.-based IGT is a clear pioneer and leader in the industry. It created video poker machines back in the 1970s; this was a major turning point in the gaming revolution because of the transformation from an electro-mechanical device to a microprocessor-driven game.

It hasn't lost its edge: It still has some of the most popular gaming machines in the casino industry. Of the 10 most popular games with gamblers, IGT games hold nine slots. The company also delivers the most profitable games, with nine of the top-10-earning poker games in the U.S.

It also supplies video lottery terminals, monitoring and control systems, and the spinning reel machines to government-sponsored gaming locations in Canada and select racetracks in the U.S. And on May 1, IGT teamed up with China's LotSynergy Holdings Limited to form a strategic alliance through a subscription and "technical cooperation" agreement.

The gambling industry is "protected," in that the public just cannot stop gambling. So for the combination of all these reasons, IGT is my deep-in-the-money call for today. I have an order in to buy 10 of the October 30 DITM calls, paying $8.90 or better. Once again, it is important to stick with limit orders and not chase trades. IGT closed at $38.56 Monday.

Game of Life

So Mother's Day has come and gone, and families around the country celebrated their lead-off batters and creators: their mothers.