$WYNN bulls quadruple money

Option traders have hit the jackpot with upside positions in Wynn Resorts (WYNN).

On Oct. 10, Market Rebellion’s proprietary programs flagged the purchase of 9,500 December $115 calls for $5.05 to $5.35 as part of a bullish roll with shares at $107.54. Open interest in the strike was 3,457 contracts before the trade occurred, showing that this was a new position.

Those calls have traded for as much as $23.30 so far today, about 4.5 times their average purchase price. The stock rose 28.42% in the same time frame, 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 3.37% to $138 this morning. The company has rallied sharply along with other casino operators since China announced plans to make gambling capital Macau a major financial center.