CLOSED – Scaling Calendar Setup in WYNN

WYNN is up 8% over the past 10 days…

and is up 12% over the past 20.

We’re seeing some overbought readings here, and I expect the stock to establish a new range as it heads into its earnings.

This is where it gets pretty interesting…

WYNN reports earnings on November 1st. That’s at least the expected report.

The option markets that are currently open are Oct and Dec.

That means the October options do not have earnings risk, and December does.

Normally, when you see this, the near term options will have a higher implied volatility than the far term.

Right now the Dec only has a 3 percentage point premium relative to October.

I expect, over the next month, for the October premium to get hit while the December stays bid. Combine that thesis along with the fact that sideways action is a good bet here… it makes sense to deploy income calendars.

Here’s the setup:

Buy to Open WYNN Oct/Dec 145 Put Calendar @3.60

This is a scaling trade. If WYNN runs above 151, we will add the 150 put calendar.

Target is 20% return on risk.

UPDATE 9-27-17: Taking Profits Here

Sell to Close WYNN Oct/Dec 145 Put Calendar @4.28

18.8% RoR

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