Traders Place Bullish Bets on MGM

By Pete Najarian, co-founder of OptionMonster

NEW YORK -- Bulls are betting on the house with MGM Resorts ( MGM).

Traders were focused Thursday on the May 15 calls, which changed hands in multiple large blocks for 27 cents to 29 cents, according to OptionMonster's tracking systems. By the end of the session almost 13,000 contracts had traded.

Those calls lock in the price investors must pay to own the stock, so they can deliver tremendous leverage if MGM moves in the right direction. But if it doesn't, the calls will expire worthless.

The casino operator, which ended the session up 0.15% to $13.77, will announce quarterly results before the market opens on May 3. The sector has performed well in the first quarter, but individual companies have certainly seen a volatile ride of ups and downs.

MGM Resorts' brands include Bellagio, MGM Grand, Mandalay Bay, and the Mirage. It also has a 51% interest in MGM China Holdings, which owns the MGM Macau resort and casino, so this company is a powerhouse.

Overall calls at all MGM strikes outpaced puts by about 23,500 to 8,500, a reflection of Thursday's bullish session. Total option volume in the name was triple the average amount.

Najarian has no positions in MGM.
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