Las Vegas Sands (LVS) 11/3/09 PriceWatch Alert Up To 37.09% Downside Protection

Posted: Tuesday, November 03, 2009 8:46 AM EDT

Las Vegas Sands (NYSE: LVS) closed yesterday at $14.29. So far the stock has hit a 52-week low of $1.38 and 52-week high of $20.73. Las Vegas Sands stock has been showing support around 13.06 and resistance in the 15.68 range. Technical indicators for the stock are Bearish and S&P gives LVS a neutral 3 STAR (out of 5) hold rating. LVS appears on the Investors Observer Volume Leaders list. For a hedged play on this stock, look at a Jun '10 10 covered call (LJJ FB) for a net debit in the $8.99 area. That is also the break even stock price for this trade. This covered call has a 228 day duration, provides 37.09% downside protection and an 11.23% assigned return rate for a 17.99% annualized return rate (comparison purposes only). A lower cost hedged play for this stock would use a longer term call option in place of the covered call stock purchase. To use this strategy look at going long the LVS Jan '11 5 Call (ZAU AA) and selling the Jun '10 10 call (LJJ FB) for a $4.70 debit. The trade has a 228 day life and would provide 32.12% downside protection and a 6.38% assigned return rate for a 10.00% annualized return rate (for comparison purposes only). Las Vegas Sands does not pay dividends at this time. [ATU-Seven Summits Research]

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