Bullish option traders are making big gains today in Wynn Resorts (WYNN).
On Jan. 5, Market Rebellion’s Unusual Activity Service found that 2,500 Weekly $93 calls, expiring on Jan. 27, were bought as part of a bullish spread for $3.30 with shares at $90.90. This was clearly fresh buying, as open interest in the strike was just 113 contracts before the activity appeared.
Those calls sold for as much as $6.37 today, nearly 2 times their purchase price. The stock rose 7.08% in the same time period, underscoring how options can far outperform their underlying shares.
Long calls lock in the price where investors can buy a stock, letting them position for a rally at limited cost with the potential for significant leverage. They carry less risk than owning shares because the most that can be lost is the price of the options no matter how far the stock might fall.
WYNN was up 3.33% to close at $97.47 today.
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