WYNN – Wynn Resorts, Limited – Investors purchased put options on the owner and operator of casino resorts today with shares of the underlying stock trading 5.80% lower at $80.17 as of 11:25 am (ET). Wynn Resorts’ shares fell as much as 7.76% in morning trading to touch down at an intraday low of $78.49. Investors expecting to see shares of the underlying stock continue to decline in value purchased 1,000 now in-the-money calls at the July $80 strike for an average premium of $3.86 apiece. Put buyers at this strike price are positioned to profit should WYNN’s shares fall another 5.00% from the current price of $80.17 to breach the average breakeven point to the downside at $76.14 by expiration day. Bearish players also picked up another 1,000 puts at the lower July $75 strike for an average premium of $2.04 per contract. Traders long the July $75 strike puts make money if the casino operator’s shares decline 9.00% and slip beneath the effective breakeven price of $72.96 by July expiration. Finally, pessimists fearing sharp share price erosion picked up 1,100 put options at the lower July $70 strike for an average premium of $0.97 apiece. Wynn Resorts’ shares much plunge 13.9% from the current price to trade below the average breakeven point at $69.03 in order for July $70 strike put buyers to start to amass profits. The overall reading of options implied volatility on WYNN jumped 12.6% to 55.89% by 11:40 am (ET).
Affiliation: Interactive Brokers
Andrew Wilkinson is the senior market analyst at Interactive Brokers Group, where he provides daily commentary and analysis on U.S. equity options trading throughout the trading day. Andrew provides webinars designed to explain option-related trading scenarios covering futures, fixed income, forex and equities.
Interactive Brokers: Interactive Brokers offers direct market access to around 80 electronic global markets from a single account. Successful traders and investors understand that superior technology and lower trading costs can result in greater returns. For 32 years we have been building direct access trading technology that delivers real advantages to professionals worldwide. With consolidated equity capital of US $4.4 billion, IB and its affiliates exceed 1,000,000 trades per day. In addition, our prudent and conservative risk policies make Interactive Brokers a safe haven for your money. Discover some of the reasons why IB, the largest independent US broker/dealer, is the professional traders' and investors' choice.
Visit: Interactive Brokers