Hotel and casino operator Wynn Resorts (WYNN) is up 12% over the past year, but shares were underwater until a large rally last month. One trader sees the stock trending higher into the spring.
That’s based on the March 2025 $87.50 calls. With 144 days until expiration, 38,508 contracts traded compared to a prior open interest of 102, for a massive 378-fold jump in volume on the option contract. The buyer of the calls paid $15.15 to make the bullish bet.
Wynn shares recently traded for about $98, meaning the option is already about $10 in-the-money. Shares recently hit the $100 range, but are still slightly off their 52-week high of $110.38 set back in April.
Strong travel and tourism trends have helped Wynn shares hold up. Revenues are also up 9% over the past year, and earnings are up 6%. Wynn shares are still inexpensive at 17 times forward earnings.
Action to take: Shares are coming off a big move higher, and interested investors may be able to pick up shares in the low $90 range in the weeks ahead as the stock consolidates before trying to push higher.
At current prices, Wynn also pays a 1% dividend.
For traders, the March $87.50 calls are a bit expensive, but that comes from being a deep in-the-money trade. More aggressive traders may want to look at buying a higher strike price, but be prepared for more volatility on the options.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.