Have you had enough of hearing about Las Vegas Sands [LVS:NYSE] nearly every week? Well, hopefully not, since every post here has shown to be profitable.
I took a short straddle position on Las Vegas Sands just now with the 44 strike price. As usual, they are the weekly options, thus, they expire on May 13, which is two days and a half away. The current option premiums available by writing both the call and put at the same time nets out to just over $1.00. I got $1.11 with a fortuitous spike up and down, but you should be able to gather a premium of about $1.03.
The current stock price is about $44.12. $1.03 represents a 2.33% payout for the rest of the week. Your break even range is roughly $42.97 to $45.03 (again, it varies on the total premium received).
The margin requirement is surprisingly small, roughly $1,300 per pair of legs, which earns you over $100. That's a very efficient use of margin. Again, the stock is quite volatile, so for those who want a more conservative approach, writing a short combination using the 45 call and 43 put will also be very reasonable. The net premiums received on these pair of legs will net you roughly 45 cents, giving you a break even range of $42.55 to $45.45.
Disclaimer: Writing uncovered (or naked) options requires substantial margin and is only available to sophisticated traders. Uncovered calls have unlimited risk and can have infinite losses. Before making any trade, always discuss this with your advisor or professional broker.
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