Pre-Earnings Option Bulls Blitz Wynn Resorts Stock

WYNN jumped almost 9% after earnings last quarter

by Josh Selway

Published on Apr 20, 2018 at 2:14 PM

After peaking above $200 back in January, Wynn Resorts, Limited (NASDAQ:WYNN) fell as low $156.54 back on March 2 amid the Steve Wynn fallout. The shares have since battled back to trade at $192.68, and sentiment has only grown more bullish around the casino concern as it prepares to report earnings after the close on Tuesday, April 24. To be more specific, there's been notable call buying on WYNN in recent weeks.

Call open interest in the security comes in at 158,870 contracts, well above the 99,588 on the put side. Zeroing in on the last two weeks in particular, the 10-day call/put volume ratio across the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) has increased to 1.93. Not only does this show call buying nearly doubled put buying, but that reading ranks in the high 85th annual percentile, showing such a preference for calls over puts is highly unusual.

Much of this activity took place at the June 190 call, which saw the largest increase in open interest during the past 10 days. Data from the major options exchanges shows almost exclusive buy-to-open activity here, so traders have been betting on a breakout above $190 from Wynn Resorts. For what it's worth, the 10 biggest open interest positions on WYNN are all calls, including peak open interest at the just overhead April 195 call, where almost 15,000 contracts are set to expire today.

As for recent earnings history, the shares surged 8.7% the day after earnings back in January, and after the April release last year they've rallied 5.9% in one day. This time around the options market is pricing in a single-session swing of 6%, based on at-the-money implied volatility data.

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