Option Traders Place Their Bets on MGM

Crowds wait outside for the opening of the MGM Grand in Macau in December 2007.
Mike Clarke | AFP | Getty Images
Crowds wait outside for the opening of the MGM Grand in Macau in December 2007.

Bulls are betting on the house with MGM Resorts.

Traders were focused yesterday on the May 15 calls, which changed hands in multiple large blocks for $0.27 to $0.29, according to OptionMonster's tracking systems. By the end of the session almost 13,000 contracts had traded.

Those callslock in the price investors must pay to own the stock, so they can deliver tremendous leverage if MGM moves in the right direction. But if it doesn’t, the calls will expire worthless.

The casino operator , which ended the session up 0.15 percent to $13.77, will announce quarterly results before the market opens on May 3. The sector has performed well in the first quarter, but individual companies have certainly seen a volatile ride of ups and downs.

MGM Resorts’ brands include Bellagio, MGM Grand, Mandalay Bay, and the Mirage. It also has a 51 percent interest in MGM China Holdings, which owns the MGM Macau resort and casino, so this company is a powerhouse.

Overall calls at all MGM strikes outpaced putsby about 23,500 to 8,500, a reflection of yesterday’s bullish session. Total option volume in the name was triple the average amount.

—Najarian has no positions in MGM.

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Pete Najarian is a professional investor, CNBC contributor, regular co-host of CNBC’s “Fast Money” and co-founder of OptionMonster.com.