DailyPlay – Opening Trade (LVS) – July 17, 2023

LVS Bearish Opening Trade Signal

View LVS Trade

Strategy Details

Strategy: Long Put

Direction: Bearish

Details: Buy to Open 14 Contracts Aug 18th $58 Puts @ $1.40 Debit per contract.

Total Risk: This trade has a max risk of $1,960 (14 Contracts x $140) based on a hypothetical $100,000 portfolio risking 2%. We suggest using 2% of your portfolio value and divide it by $140 to select the # shares for your portfolio.

Counter Trend Signal: This stock has been bullish but is expected to trade lower with a top of around $60 in place.

1M/6M Trends: Bullish/Bullish

Technical Score: 8/10

OptionsPlay Score: 67

Stop Loss: @ $0.70 Credit (50% loss).

Entering the Trade

Use the following details to enter the trade on your trading platform. Please note that whenever there is a multi-leg option strategy, it should be entered as a single trade. 

Please note that these prices are based on Friday’s closing prices. Should the underlying move significantly during the pre-market hours, we will likely adjust the strikes and prices to reflect a more accurate trade entry. 

Investment Rationale

With last week’s important CPI print and upbeat earnings pushing markets above their double-top resistance, all signs seem to be positive. However, as markets grind higher, we start to see opportunities where the risk/reward favors bearish exposure. One opportunity that I see is LVS with upcoming earnings on Wednesday after the close. LVS has rallied over 80% since Oct and since the beginning of the year has been forming a head & shoulders formation, which suggests that rally is at risk of a pullback. Currently trading at nearly 31x forward earnings, its priced based on the optimism of China’s reopening. LVS has exposure primarily in to Singapore and Macau and economic data out of China continues to disappoint over the past few months, suggesting soft travel demand to these destinations. My hunch is that guidance for LVS may come in light and become a catalyst for LVS to trade back down toward its $54 neckline. Look to buy an Aug 25 $58 Put @ $1.40 Debit with a stop loss at $0.70. 

LVS  – Daily