Wynn Resorts, Limited (WYNN) Put Players Target a Critical Level

Wynn Resorts, Limited (NASDAQ:WYNN) is one of the leading laggards on the Nasdaq today -- off 15.5% at $110.27, and earlier hit a two-year low of $109.52 -- after the firm posted a first-quarter earnings miss and slashed its dividend payment by 67%. Against this backdrop, the stock has been placed on the short-sale restricted list, and put players are flocking to WYNN's options pits, with the contracts crossing at 13 times the average intraday pace.

Given that today's bear gap has so far been contained near $110, this area has come into focus. For example, WYNN's May 110 put has received notable attention, and according to data from the International Securities Exchange (ISE), a small portion of the day's activity is of the buy-to-open kind. In other words, those who are initiating new long puts expect the security to breach $110 by the close on Friday, May 15 -- when front-month options expire.

Meanwhile, WYNN's weekly 5/1 110-strike put is also popular, and -- per the ISE -- it appears new short positions are being established here. Simply stated, these put writers expect the security to maintain its foothold north of $110 through week's end -- when the series expires.

Heading into today's session, the stock was already down nearly 36% year-over-year. Option traders were keeping the faith, though. At the ISE, Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), WYNN's 50-day call/put volume ratio of 1.62 ranks just 9 percentage points from an annual high. Should Wynn Resorts, Limited (NASDAQ:WYNN) extend its downtrend, a continued shift in sentiment in the options pits -- or a new round of price-target cuts -- could translate into a fresh wave of selling pressure. In fact, no fewer than eight brokerage firms reduced their price targets on WYNN post-earnings.