A moderately bullish play in Las Vegas Sands (NYSE:LVS)

Las Vegas Sands LVS shares are modestly lower today – off 20 cents to $31.54 – to underperform the broader market. One investor seems to be jumping on this pullback and may have opened a large bull call spread.

The January 30 call has seen 10,000 contracts trade on open interest of 22,000 while the January 31 call has seen 10,000 contracts change hands as well. Open interest of this strike stands just at 845.

In the first hour of trading, the 30-strike calls traded in one lump sum at the ask price of $5.00 per contract. The 31-strike calls, meanwhile, traded as two blocks of 5,000 – one traded at the bid price of $4.35 per contract while one went off at the mid price of $4.40.

On average, the investor bought the 30 calls for $5.00 and sold the 31 calls for $4.375, paying a net debit of 62.5 cents for each spread (or $625,000 in premium for the lot of 10,000 calls). This debit is the most the investor stands to lose if LVS is trading below $30 when the options expire in 128 days.

The maximum potential profit, meanwhile, is 37.5 cents, or the difference in strike prices less the premium paid. Profit peaks if LVS is still trading north of $31 at expiration. This is a return on risk of 60%.

Because LVS is trading at $31.54, both of these calls are in-the-money. So while the return on risk is lower than an out-of-the-money spread, the probability of profit is typically higher. Breakeven, after all, is $30.625, which is 3% below the stock's current level.

I ran the parameters of this trade through the OptionsHouse probability calculator – one of the tools available in every virtual trading account. (Sign up for your own free virtual options trading account here.) Based on the probabilities generated by the tool using today's implied volatilities of the January at-the-money options LVS has a 46.65% chance of finishing above $31.00 at January expiration (securing the max profit). The calculator also shows a 49.17% chance of the stock finishing below the 30 strike and this trade incurring the maximum loss.