Trade Breakdown: WYNN

Strategy by Charlie Bathgate

Trade Breakdown: WYNN


Many tech names have given us amazing opportunities to make money the past couple weeks, but there are also other sectors of the market that have seen huge buying as well.

WYNN has remained quiet since its 40-point dive in late January. Since then, the stock has bounced back and forth from the $160 to $170 price range, for the most part staying in a tightly consolidated area around $165.

Then last week the tide began to turn.

On March 2nd, the stock fell in the first hour of trading through $160 to a low of $157. Shortly after, a huge call buyer bought a block of May calls valued at over $4.7M.

Approximately 45 minutes later a $1.6M monthly May call sweep hit the board into the weakness as well. This unusually large dip buying hasn’t been seen in this name for quite some time. Then on Monday March 5th, a $2.88M block of May 175 calls got purchased around the second hour of trading:

The time and sales was filled with frequent market sweeps and refreshing orders shortly after the huge call buying. The stock itself bounced off of its support area and closed at $165.05 for the day. We still saw continued refreshing orders and market sweeps hit the tape throughout the week compared to the dull action from the past month.

Today, WYNN broke through its $170 resistance level and opened the day at $173.24. Here we saw more momentum coming into the stock with no sellers in sight. Buyers hit the offer repeatedly as the stock cruised up over 7% passing the $180 mark.

Here’s how some of our members we able to cash in on the action:

Let’s break down these two trades.

Rickjaydub, a regular contributor to the Steamroom, took advantage of the weakness in WYNN.

On Monday March 5th, he purchased the weekly March 170 Calls at $1.02 when smart money bought into weakness. He then rode the momentum in the stock the entire week as buyers hit the tape and no selling pressure came into play. He sold his position today within the first hour of trading to take advantage of the gap higher and lock in gains. That’s an estimated profit of about 273%!

Taras also purchased calls alongside the smart money. He bought himself time by buying the monthly May 180 calls around $4.86 on Monday at approximately 11:30am. He paid a higher premium to buy time just in case the market took an unexpected turn for the worse. Regardless, the action was hot enough to lock in a handsome profit. He sold 1/3 of his position which secured him a nice 158% gain on the play.

What are the commonalities between these two profitable trades? Both the SPY and WYNN moved higher together as they both bounced off key support areas, over $8M worth of WYNN calls were purchased at technical support levels during weakness, there were no sellers pushing the stock lower, and the gaming sector had steady buying the entire week.

All these bullish factors happening simultaneously allowed our members to take this trade down!

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