Add WYNN Puts

Play a Macau Slowdown

By Bryan Bottarelli
Wednesday, September 10, 2008 10:32 AM EDT
Wed, 10 Sep 2008 14:32:00 GMT

PLAY: Buy the WYNN September 80 Puts (UWY UP) at or under $3.60, good for the day. Place a protective stop limit at $2.00 and a per-determined sniper sell at $4.70.

Dear Bottarelli Research Member,

Over in my sister-service, Bottarelli Research LEAPS, I outlined a reason for adding put options on Macau casino operator Las Vegas Sands (LVS – NYSE).

In short, a recent news report from Macao Daily said that the Chinese government is determined to control the growth of Macau’s gambling industry. As a result, they could begin placing new restrictions on visits to Macau. Starting as early as this October, the Chinese government could begin limiting the number of Macau visits from the mainland — and as you can imagine — any new visa restrictions will severely stunt Macau’s gambling revenues and growth. Therefore, the remainder of the 2008 year looks to be well below expectations for casino operators like MGM, WYNN, and LVS.

Now here’s the thing. As I write, shares of LVS are down over 10% (shown below), and this allowed us to lock in a quick 75% gainer on our LVS put LEAPS.

LVS

But interestingly enough, shares of WYNN are only down 4%. In fact, comparing the stock charts of LVS and WYNN shows you that WYNN could move a lot further down before matching the price performance of LVS.

WYNN

Therefore, I’d like to go ahead and add WYNN puts to capitalize on this “downside catch-up” effect. Here’s the play:

PLAY: Buy the WYNN September 80 Puts (UWY UP) at or under $3.60, good for the day. Place a protective stop limit at $2.00 and a per-determined sniper sell at $4.70.

And as always…

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

© 2012 CSR Group, LLC. All rights reserved. Published in USA.

Information, opinion, research, and commentary contained herein is obtained from sources believed to be reliable; their reliability, however, cannot be guaranteed. The maxim of Caveat Emptor applies — let the buyer beware. Bottarelli Research does not provide individual investment advice, act as an investment advisor, or individually advocate the purchase or sale of any security or investment.

Investments recommended in this service should be made only after consulting with your investment advisor, and only after reviewing the prospectus or financial statements of the company. Bottarelli Research reserves the right to use e-mail endorsements and/or profit claims from its subscribers for marketing purposes. All names will be kept anonymous and only subscriber’s initials will be used unless express written permission has been granted to the contrary.

CSR Group, LLC expressly forbids its writers from having a financial interest in any security recommended to readers. Furthermore, all employees and agents of CSR Group, LLC and its affiliate companies must wait 24 hours before following a published recommendation.

Bottarelli Research alerts contain time-sensitive information, and are published and distributed to members with urgency. Because of this, not all published materials can be adequately proofread, and an occasional spelling or grammar error may exist.


Other Options Alerts From September 2008