Here’s an after earnings trade I like. Hopefully, over the next few weeks we’ll see some profit taking on a name which is overbought and with a MACD signal rolling over on the 5 day charts. In June $WYNN was at 130 and today touched 170. Earnings were very positive but well built-in. Expectations of strong earnings (which we saw yesterday) have been driving this stock.
- Buy Aug 160 Puts and Sell Aug 155 Puts.
- The trade will cost you about $1.90
- Break even is 162.50.
- Max Profit if $WYNN closes under 160 on the Aug 19th expiration.
The Volatility has pulled back after earnings though is still a bit high this morning (31% HV vs. 33% IV). I’m expecting the stock to meander and pull back a bit… I wanted to get in as close to 170 as possible.