$WYNN option bulls triple money

Bullish option traders are making big gains today in Wynn Resorts (WYNN).

On Nov. 10Market Rebellion’s Unusual Activity Service found that 4,000 December $75 calls were bought as part of a bullish spread for $4.18 to $4.23 with shares at $72.95. This was clearly fresh buying, as open interest in the strike was just 2,582 contracts before the activity appeared.

Those calls have been sold for as much as $13.94 today, more than 3 times their purchase price. The stock rose 21.41% 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 is up 1.94% to $86.61 in midday trading.

Ready to start trading? Try Unusual Option Activity Essential. Learn how you can follow the “smart money” with a fresh UOA trade idea each week – including technical levels so that you know how to manage each trade!

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