Wynn Resorts Joins Early Morning Casino Stock Surge

Short interest has surged on the casino name

Managing Editor
Jul 1, 2019 at 9:26 AM
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Casino giant Wynn Resorts, Limited (NASDAQ:WYNN) is moving higher alongside its sector peers this morning, seeing a lift after Chinese territory Macau reported a 5.9% year-over-year rise in gambling revenue for the month of June, more than analysts were expecting. WYNN was last seen up 5% in electronic trading, as traders brush off a price-target cut to $160 from $166 out of Jefferies.

Looking at the charts, Wynn Resorts stock has spent the majority of last month recovering from its June 3 five-month low near $90. This upside recently ran out of steam near the equity's 120-day moving average, a trendline that could be toppled in today's trading. Year-to-date, the security is up 25%.

On the options front, calls look to be extremely popular among traders. This is per data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which shows WYNN sporting a 10-day call/put volume ratio of 3.73, ranking 1 percentage point from an annual high. In other words, nearly four calls have been purchased for every put over the past 10 days, and the rate of call buying has been quicker than usual.

Some of this activity may have been at the hands of shorts hedging against any additional upside. Short interest surged 36% during the past two reporting periods on Wynn stock, and now accounts for just over 6% of the equity's total available float. At WYNN's average pace of daily trading, it would take shorts about three days to buy back their bearish bets.

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