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Options Corner: Why The Smart Money Is Brushing Aside Las Vegas Sands Stock's Post-Earnings Implosion
['Josh Enomoto']
Benzinga - Stock Market Quotes, Business News, Financial News, Trading Ideas, and Stock Research by Professionals
Although the casino and resorts giant delivered an earnings beat, profitability concerns tied to the company's Macao unit sparked a massive sell-off in LVS stock.
Still, even with the carnage, the footprint of smart money traders reveals that they're paying a premium for upside optionality.
The smart money at the very least recognizes the possibility of a dead-cat bounce.
Instead, as the volatility skew demonstrates, the smart money is very much structured to benefit from a dead-cat bounce.
Combined with smart money sentiment, this call spread — which features a breakeven price of $53.96 — offers a potentially rational form of speculation.