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.
I’ve always heard you should not fight the trend, but I couldn’t resist… This might be a long-shot but it felt right this morning.
The big trade yesterday was $GOOG . Up 12.77% ($67.50) to 596. There was a nice option trade with 1000, 580 calls passing. That trade netted over $1,000,000 today. The calls were way underpriced at about 10% premium… Yesterday, I was thinking there was so much positive expectation, that I’d stay away (or go contrarion…)
I’m still watching $SLV and $WYNN, both for different reasons: $SLV is seeing buyers return with uncertainty, $WYNN is overbought. The $WYNN options are expensive but it seems to be bumping up against strong resistance at 160. If you’re bearish or hoping for some pullback, one possibility would be a Aug 155/145 Put Vertical for about $3.00. Break even at 152. Earnings are July 18th.