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Friday, April 12, 2024

Deal Or No-Deal, Frenzied Action In WYNN Options Continues After Stock Resumes Trade


Today’s tickers: WYNN, FL & JPM

WYNN – Wynn Resorts, Ltd. – More than 36,000 option contracts changed hands on the casino operator on Friday morning before the stock was halted with news pending at 10:18 a.m. in New York trade. Wynn Resorts kicked off the final trading session of the week up better than 6.0%, making it the biggest gainer in the S&P 500 Index, after an 8-K filing, which has since been retracted by the company, suggested progress had been made on a new resort in the Cotai region of Macau. The stock resumed trading after Wynn Resorts said the 8-K was mistakenly filed and shares surrendered gains temporarily as the market digested news of the retraction. Clawing back the filing does not seem to have dampened excitement over potential expansion in the gambling hub, as Wynn’s shares quickly regained their footing to hit an intraday high of $132.59 after trading resumed. Options volume on the Las Vegas-based company has doubled since this morning, with more than 80,000 contracts in play as of 1:00 p.m. ET. Investors are favoring calls over puts, exchanging roughly 1.9 call options on WYNN for each single put contract in action today. The stock continues to be the leader in the S&P 500, though shares are off their highest level this afternoon, currently up 5.5% on the day to stand at $128.77.

FL – Foot Locker, Inc. – Options on athletic footwear and apparel retailer, Foot Locker, Inc., are more active than usual this morning following the release of better-than-expected fourth-quarter earnings after the bell on Thursday. Shares in the New York, New York-based Company rallied earlier in the session, but slipped into negative territory to trade 1.1% lower on the day at $29.10 as of 11:30 a.m. on the East Coast. The stock trades at its highest level in at least five years, up 20.0 % year-to-date and roughly 75.0% off the August 8, 2011, 52-week low of $16.66. Activity in March expiry call options today suggests some strategists are positioning for shares to extend gains in the next couple of weeks. Options volume is most concentrated at the Mar. $30 strike, where more than 4,700 calls changed hands against 1,173 contracts. It looks like most of the call options were purchased for an average premium of $0.63 apiece. Traders long the calls stand prepared to profit at expiration in the event that Foot Locker’s shares rally 5.25% over the current price of $29.10 to surpass the average breakeven point at $30.63.

JPM – JPMorgan Chase & Co. – Shares in JPMorgan had a good week, rising some 6.6% following the Company’s annual investor day. The stock trades up 0.55% at $40.59 in early-afternoon trade, and it looks like some strategists dabbling in short-term option contracts on the name are positioning for an encore performance next week. Traders snapped up some 1,400 calls at the Mar. $41 strike this morning for an average premium of $0.36 each, and picked up another 2,300 call options at the higher Mar. $42 strike at an average premium of $0.13 apiece. Bullish positioning in the weekly contracts may pay off at expiration as long as JPM’s shares rally another 1.9% and 3.8% to settle above the average breakeven prices of $41.36 and $42.13, respectively.


Caitlin Duffy

Equity Options Analyst


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