$WYNN deals a winning hand

Option traders who opened bullish positions in Wynn Resorts at the beginning of the week are already reaping sizable profits.

On Monday, Investitue’s market scanners identified the purchase of 4,275 May $175 calls for $6.75 with shares at $161.81. Open interest in the strike was only 3,067 contracts before the activity appeared, showing that this was fresh buying.

Those calls sold for $16.20 today, nearly 2.5 times their purchase price. The stock rose 11.5% in the same time frame, underscoring how quickly options can far outpace gains in 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 6.35% today to close at $179.11. The resort and casino operator reported its company update last night citing strong growth in Macau as well as a dividend increase.