CZR/8800 - That ship has sailed at $22.5Bn. How are they going to make $1Bn before the next time they go BK? They lose $1.7Bn last year and they'll lose about 350M this year - they are going on on-line to save them. BYD is $7Bn at $62 and they make about $500M and only lost $135M last year and back on track this year - much better and $7Bn is not crazy for those earnings. BYD has 28 low-rent casinos but nothing wrong with that if they make money. I think gaming makes a nice bonus for them so let's add a play on BYD to the LTP:
- Sell 10 BYD 2023 $50 puts for $6.50 ($6,500)
- Buy 20 BYD 2023 $55 calls at $16 ($32,000)
- Sell 20 BYD 2023 $75 calls for $8.50 ($17,000)
- Sell 5 BYD Jan $70 calls for $4 ($2,000)
That's net $6,500 on the $40,000 spread that's $14,000 in the money to start so the upside potential is $33,500 (515%) at $75 or better. We made a 1/4 sale of short calls using 144 of our 508 days. Three more sales like that and we have a free spread so no reason to press our luck. Worst case is owning 1,000 shares at net $56.50 - still 10% off the current price.
