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Here’s why traders are looking to cash in on casino earnings

Casino stocks are surging this year, and the options market is implying some big moves for two names that are reporting earnings this week.

Las Vegas Sands is scheduled to report earnings after the bell Wednesday followed by MGM Resorts before the market opens on Thursday. The options market is implying about a 4 percent move in either direction for both stocks after their reports, according to Mike Khouw of Optimize Advisors.

The reports come after a big beat for rival Wynn, which posted strong earnings after the bell on Tuesday, sending the stock soaring more than 6 percent during Wednesday's trading session. The shares have rallied nearly 46 percent in 2017. Analysts in particular looked at numbers from Wynn's Macau properties, which brought in $587 million in first-quarter revenue, a beat in expectations but still down 3 percent year over year.

For Khouw, Asia will come as a key focus for the other casino companies reporting this week as well. "Las Vegas Sands [brings in about] 80 percent of revenue from Asia, [and] 20 percent for MGM," Khouw explained Tuesday on CNBC's "Fast Money." While business has been lucrative recently, investors are still weary of the growth and stability for casinos in Asia.

Therefore, Khouw noted that investors are expecting more volatility on earnings for Las Vegas Sands. "Normally you would expect the more levered of businesses, that's MGM in this case, to be more volatile on earnings but actually, [it's] Las Vegas Sands [that could be]."

Analysts polled by FactSet are expecting Las Vegas Sands to report earnings of 61 cents per share on $3 billion in revenue. MGM Resorts is projected to post earnings of 30 cents per share on $2.6 billion in revenue.

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