$WYNN keeps paying off for bulls

Wynn Resorts has been a frequent target of upside option plays in recent months, and traders collected winnings on the name again today.

On Aug. 2, Investitute’s market scanners identified the purchase of 2,000 December $130 calls for $7.90 with shares at $125.35. This was clearly a new position, as open interest in the strike was only 315 contracts before the trade occurred.

Those calls ended today’s session listed at $18.23 today, more than double their purchase price. The stock rose 17.7 percent in the same time period, illustrating the kind of leverage that can be achieved through options. In several instances on CNBC, Investitute co-founder Pete Najarian has cited unusual call activity that has led to winning trades.

Long calls lock in the price where a stock can be purchased, gaining with a rally and providing leverage to the underlying shares. The contracts can quickly lose value if the stock stalls or pulls back but also carry less risk than owning the shares themselves.

WYNN jumped 4.45 percent to $147.49 today. The company rallied along with other casino operators after Nomura cited a “noticeable pickup in demand” in the Macau gaming market toward the end of this month. In addition, the Nevada Gaming Control Board reported this morning that casino winnings were up 0.3 percent in September from the same period in 2016.