A small gaming stock has pulled back hard following a big rally, but now the bulls are back.
Remember Scientific Games (SGMS)? It’s a provider of gambling-technology like slot machines and lottery systems. But it was also viewed as a key beneficiary to the U.S. Supreme Court’s decision to legalize sports betting in May.
SGMS spiked on that news, but rolled over the next month and cratered in August after quarterly results missed estimates. All told, the debt-laden company lost more than half its value peak-to-trough.
But it’s been stabilizing in the last week and today the someone purchased about 20,000 January 40 calls for $6. It was one of the largest options trades in the entire market.
Remember, calls fix the price where a security can be purchased. They can appreciate much more quickly that shares when a rally occurs but also dwindle to zero if the underlying moves the wrong way. See our Knowledge Center for more.
SGMS rose 2.32 percent to $30.83 in afternoon trading. Aside from the big drop since the spring, the stock is attempting to hold support around the same level where it peaked a decade ago, in September 2008.
Calls accounted for a bullish 97 percent of the overall options volume in the name.