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What Happens In Vegas, Stays In Vegas

Options traders cannot leave the casino - at least if call activity on Las Vegas Sands is any indication.

Despite a slight give back in the stock today, we saw another furious round of betting, with options traders buying huge chunks of the September 19-strike calls and 20-strike calls.

This a decidedly different take from March, when investors were all but certain this sector had crapped out on bloated balance sheets and a suddenly gambling adverse consumer.

Couple asset sales later, and a brighter outlook from Macau, and now these stocks, and Las Vegas Sands in particular, have hit the jackpot. LVS alone is up over 1000% since its March lows.

And it has little to do with what's happening in Vegas.

"Macau has been on fire," said Sanford Bernstein's Janet Brashear. "Last year, nearly seventy percent of their profits came from Macau, and with China is in the midst of another boom cycle, it's enough to make investors forget about what's happening in Vegas," said Sanford Bernstein's Janet Brashear (OUTPERFORM).

Option traders have been all over this name. A few weeks back, we saw huge buying at the Jan 10 15-strike call when it was widely out-of-the money, and as likely to pay off as that weird green spot on the roulette table (I get paid per gambling cliché, so bear with me here). Now those calls in well in the money, and the buying has migrated to the 20-strike call on a number of different expires.

On CNBC.com now:

"LVS was a great candidate for option strategies because its outcome was essentially binary; it was going to find its way out of the wilderness or it was going to die," said "Options Action" star and Bill Clinton doppelganger Scott Nations. "Traders have that September $43 level in their sights, remembering that even that level was well below the October 2007 high of $138."

Questions, comments send them to us at: optionsaction@cnbc.com

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    Melissa Lee is the host of CNBC's “Fast Money” and “Options Action.”

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