TradeKing Midday Market Call Recap - $SPX & $WYNN

TK All-Star posted on 06/23/16 at 02:24 PM

Featuring @BrianOverby  &  @MNKahn



Quick Takes Pro Market Technician Michael Kahn Analyzes the S&P 500:


SPX was trading at 2,087.64 at the time of analysis, up 4.39 on the day. The index had a breakout to the upside a couple of weeks ago, but it could not hold. Then, last week, we had a bounce back when the Brexit vote started to look more in favor of Britain staying in the European Union. Even with the bounce, Michael thinks the trend is still down. The transports (TRAN) fail to keep pace with the broad market indexes, which still points to a “Dow Theory” sell signal.




Michael Kahn’s Chart of the Day: Wynn Resorts Ltd (WYNN):


Wynn Resorts Ltd. was trading around the 101.00 level during the time of analysis, above its 50-day moving average of 95.36 and 200-day moving average of 76.96.


WYNN is in the gaming industry and that sector has had a long declining trend, which finally bottomed in the start of 2016. Since that time, there has been a small upward trend. However, we have had a breakout failure to the upside at an important resistance level. Michael is leaning bearish at this point, but would like to see a confirmed support line break at the 97.75 level to become a full bear on the stock.




TradeKing “Options Guy” Brian Overby Analyzes Wynn Resorts Ltd Volatility & Dividends:


Wynn Resorts Ltd. 30-day Implied Volatility (IV) is trading in the low end of the yearly range at about 40%. Brian notes that, even though it is in the low end of the 52-week range 40% 30-day IV, there is still a lot of IV in general, and WYNN stock is over $100 in price.  


Wynn Resorts Ltd. pays quarterly dividends yielding about 1.97% annually and went ex-dividend on 05/13/2016. The next earnings announcement is anticipated for 08/03/2016.




Brian Overby Shares WYNN Paper-Trading Strategies:

Brian’s first paper trade was an out-of-the-money Long Butterfly with Puts, a bearish trade that is lower in cost when the option contracts trade with “higher” IVs. His second paper trade was it bit more on the neutral-to-bullish side, a Skip Strike Butterfly with Calls.


Brian’s First Paper Trade - Long Butterfly with Puts


- Buy 1 Jul 15th 2016 WYNN 91 Put

- Sell 2 Jul 15th 2016 WYNN 96 Put

- Buy 1 Jul 15th 2016 WYNN 101 Put


- 24 days to expiration


- Net Bid 0.39, Mid 0.85, Ask 1.01 for the strategy

- Net Debit is 0.85 if we get it at the mid-price; note that this is not always possible


- Maximum potential loss: 0.85

- Maximum potential gain: 4.15

- Total commission to enter this trade at TradeKing is $6.90


Brian’s Second Paper Trade - Skip Strike Butterfly with Calls.


- Buy 1 Jul 1st 2016 WYNN 106 Calls
- Sell 2 Jul 1st 2016 WYNN 108 Calls

- Buy 1 Jul 1st 2016 WYNN 112 Calls


-  10 days to expiration


- Net Bid .20 DB, Mid 0.01 CR, Ask 0.18 CR for the strategy

- Net credit is 0.01 if we get it at the mid-price; note that this is not always possible


- Maximum potential loss: 1.99

- Maximum potential gain: 2.01


- Total commission to enter this trade at TradeKing is $6.25


Important notes: Option prices are given as a per-contract amount. Multiply loss and gain figures by 100 shares and by the number of contracts traded to determine the amount of the full potential loss or full potential gain. No additional calculations are needed to determine commission costs.


TradeKing Options Tools used:

- Detailed WYNN Quote

- TradeKing Volatility Charts

- TradeKing Options Pricing Calculator

- TradeKing Probability Calculator

- TradeKing P&L Calculator


Options involve risks and are not suitable for all investors. Prior to buying or selling options, an investor must receive a copy of Characteristics and Risks of Standardized Options, sent to you in previous communication. Additional copies may be obtained by calling TRADEKING at 877-495-KING or by visiting www.TradeKing.com/ODD.


Multiple leg options strategies involve additional risks, and may result in complex tax treatments. Please consult a tax advisor.


At the time of publication and in the preceding month, TradeKing and/or Michael Kahn did not have ownership greater than 1% in any stocks mentioned; did not have any other actual, material conflict of interest known at the time of publication; have not received compensation from a public offering nor from investment banking services related to any companies mentioned within the past 12 months, nor expect to receive any in the next 3 months; nor engaged in market making in the securities mentioned.


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Posted by TK All-Star on 06/23/16 at 02:24 PM

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