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Option Bull Bets $1.6 Million On Wynn Resorts, Limited

Wynn Resorts, Limited's September 240 call is in focus today

by 7/29/2014 12:30 PM
Stocks quoted in this article:

Wynn Resorts, Limited (NASDAQ:WYNN) is up 3% to trade at $217.18 this afternoon, after posting a second-quarter earnings beat earlier. Not surprisingly, options traders are rushing to the call side of the aisle, where volume is running at 12 times the intraday norm.

Most popular in WYNN's options pits is the September 240 call, where roughly 13,800 contracts have crossed the tape, compared to open interest of just over 1,000. The majority of the calls were exchanged as a block of 10,750 contracts, which traded near the ask price, at $1.45 each -- suggesting they were bought, and Trade-Alert has marked the block "opening" -- for a total cash outlay of nearly $1.6 million (premium paid * number of contracts * 100 shares per contract). This amount represents the call buyer's maximum potential risk, should the contracts expire out of the money. By contrast, the bettor's potential gains are theoretically unlimited, north of the at-expiration breakeven mark of $241.45 (strike plus premium paid).

On the charts, Wynn Resorts, Limited (NASDAQ:WYNN) has performed well, tacking on roughly 63% year-over-year. In fact, with this morning's sharp move higher, the casino stock has broken through a previous layer of resistance at its 120-day moving average, and this trendline could now reverse roles to act as support. Should that happen, WYNN could benefit from some short-covering activity, as nearly 5% of the equity's float is sold short.


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