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Option Activity for Wynn Resorts, Limited (WYNN)
Tuesday, June 29, 2010
Casino concern Wynn Resorts, Limited (WYNN) has fallen in tandem with the broader equities market today. Along with general downside pressure from the Street, the gambling guru could be responding to comments from the chief executive of Sands China, who on Monday reiterated the Macau government's gambling revenue growth forecast of 30% for 2010. Earlier this month, Wynn Macau Chief Operating Officer Linda Chen called that guidance "conservative," as she expects high-roller revenue to remain solid through the second half of the year.In light of the equities' retreat, put players have pounced on WYNN today. So far, WYNN has seen about 16,000 puts cross the tape – almost four times its predicted single-session volume of fewer than 4,400 puts.
At last check, WYNN's July 75, 80, and 85 puts have attracted notable attention, with most of the puts exchanged at the ask price – pointing to buyer-initiated activity. Nevertheless, with put open interest exceeding volume at all strikes, we can't yet tell how much of today's front-month activity will translate into freshly purchased bearish bets. On the other hand, the at-the-money August 80 put has seen more than 1,000 contracts change hands on open interest of fewer than 500, hinting at new positions. Furthermore, 68% of the back-month puts have traded at the ask price, confirming our suspicions of buy-to-open activity. By purchasing the August 80 puts to open, the buyers are betting the shares of WYNN will settle south of the $80 level by the time August options expire. In early afternoon trading, the shares of WYNN are testing support at the round-number $80 level, after giving up more than 6% in intraday activity. Potentially helping to contain the security's pullback is its 20-week moving average, which – in conjunction with its 10-week and 32-week cohorts – has guided the stock more than 125% higher during the past year.
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