Wynn Resorts, Limited (NASDAQ:WYNN) – Trading traffic in call options on casino resort operator, Wynn Resorts Ltd., this morning suggests one strategist is positioning for shares in the name to rally substantially by year end. Shares in Wynn Resorts are down 1.2% this morning to stand at $105.67 as of 11:50 a.m. ET. The most active contracts on WYNN by volume so far today are the Dec. $122.5 and $130 strike call options. It looks like one trader initiated a bull call spread, buying 850 calls at the Dec. $122.5 strike and selling the same number of calls at the higher Dec. $130 strike, all for a net premium outlay of $0.22 per contract. The spread starts making money if shares in the casino operator surge 16% to exceed the breakeven point at $122.72, with maximum potential profits of $ per contract available on the position in the event that WYNN shares jump 23% to a new six-month high of $130.00 by December expiration. Wynn Resorts Ltd. shares traded up to a 52-week high of $138.28 in May.
PetSmart, Inc. (NASDAQ:PETM) – Options volume on the specialty retailer of products and services for pet owners is ticking higher today ahead of PetSmart’s third-quarter earnings report after the closing bell. Shares in PETM, up 30% since the start of 2012, trade 0.20% higher this afternoon to stand at $65.83 as of 12:20 p.m. in New York. Trading traffic in November and December expiry call options in the early going indicates some strategists are preparing for a post-earnings pop in the price of the underlying. Short-dated bullish options with two full trading sessions remaining to expiration are seeing the most volume, with upwards of 525 calls in play at the Nov. $70 strike. Time and sales data suggests a slight majority of these contracts were purchased, while some of the call options were sold. Meanwhile, the Dec. $70 strike call changed hands roughly 270 times in morning trading versus open interest of 326 contracts. It looks like most of the calls were purchased at an average premium of $1.15 apiece. Traders long the Dec. $70 calls may profit at expiration next month should PetSmart’s shares jump 8% to trade above the average breakeven price of $71.15. PETM’s shares last traded above $71.15 back on October 9th.
Equity Options Analyst
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