LVS (Las Vegas Sands Corp)

LVS has some exciting plans for development in the Macao project in China. This is going to be the Las Vegas of the Asian world and LVS owns a significant portion of the development rights. The company has very steady EPS and revenue growth over the last several quarters and the expectation is that these numbers will significantly improve as construction is completed in China and the resorts begin to draw in crowds.

Lehman gave me stock in a 2ndary offering at $50.25 back in March and I have managed to hold 2,000 shares from that purchase. Since that time I have traded in and out a bit trying to get a larger position but hedge my exposure from time to time as the stock has been a bit volatile and the option premiums have been very attractive. I have managed to rack up realized losses of $55,000 (good from a tax standpoint) while accumulating unrealized gains of $136,000 on the current 4,000 shares I own. I have half of my position hedged with Feb 90's and those are likely to be called. If the stock is still trading well I will likely buy in stock sometime before expiration in order to keep a lower basis lot and have the calls assigned versus this higher purchase.

Jan 25, 2007

LVS has had another incredible run and I have some nice unrealized gains stacked up. I am growing a bit concerned that the stock may become overheated and while half of my position is hedged deep in the money (Feb 90's), i decided to hedge the other half just out of the money. The premium for the Feb 110's looks good and so I got $3.80 for the 20 calls. I will want to keep at least 2,000 shares past expiration so if we trade up to where the new set of calls is in the money, I will have to buy in stock at some point, but it seemed best to have a little defense here at the top portion of the channel LVS has been running in.

Feb 10, 2007

The stock traded down this week which is actually ok with me. I decided to cover both the Feb 110 calls and the Feb 90 calls at different points during the week. I only had to pay 35 cents for the 110's but recognized a moderate loss on the 90s. Alltogether, these 2 lots of calls netted me a small amount of profit, but the main thing is they cut down on the volatility in my account as I didn't capture all of the gains from the stock moving up, but then also was not hurt nearly as bad by the subsequent decline.

Now I have 4,000 shares un-hedged. I have a realized loss of $54,000 but an unrealized gain of $140,000 most of which is long-term which is nice for the tax ramifications for our partners.

Feb 16, 2007

The stock has sold off through the 50 day average which is a bit concerning and the first 2 trading days after that selloff were in light volume and didn't make much headway. I have become more cautious the last couple of weeks and decided to turn out the short-term portion I own and hedge my original position with March 90's. This way I can hold my original stock for long-term gains (to the tune of $85,000 or so) but still have at least some protection against falling prices.