Tony Zhang Breaks Down An Interesting Caesars Entertainment Options Trade

On CNBC's "Options Action," Tony Zhang said that he saw an interesting options trade on Friday in Caesars Entertainment CZR. He finds it interesting because it gives us a glimpse into how options traders might be utilizing strategies in options to time an eventual recovery in the casino stocks.

He noticed that 7,500 contracts of the May $9 calls were sold for 35 cents. Zhang explained that this is a bullish to neutral view, since the trade breaks even around 15% above the closing price on Friday. The trader has also bought the June $9 calls for 80 cents and the June $11 calls for 20 cents. So the trader is betting that the stock is going to stay rangebound in May and then move higher in June, said Zhang.