WYNN – a Credit Spread from the Desert…

It’s been a bit since my last post. I’ve been traveling. But I’m back, Baby. And with a trading vengeance!

Here’s a trade idea that we gave out in our Market Taker LIVE Advantage Group Coaching daily class. It’s in Wynn Casinos (symbol WYNN, $138.96, off $0.22). This stock has been in a range—a wide range—for easily four months.

WYNN is near the top of the range now, with some minor resistance at $140 a share and strong resistance at $144. The stock hasn’t been above $145 in two years. The implied vol is somewhat low (as it is, pretty much across the board), but it’s above historical. All this adds up to a nice little call credit spread play.

Here’s what I traded today:

Sold Aug-30-2103 145 call

Bought Aug-30-2103 150 call

These are WYNN Weekly’s, expiring Friday August 30th.

I traded it for a net credit of $0.53. Break-even is $145.53, ~$6.50 higher than where we are now, with ~ 3 weeks until expiration. .   I like this trade if it can be done anywhere at or above a $0.50 credit.

If the market continues its rout lower, I’d try and close it early. If I can close at $0.10 or better, I’ll be really happy. If it goes against me, I’ll probably roll it up.

PS.  We covered this in a video at cboe-tv.