Sharp Reversal: Add WYNN Puts

Playing a $75 Top

By Bryan Bottarelli
Wednesday, September 30, 2009 10:01 AM EDT
Wed, 30 Sep 2009 14:01:00 GMT

PLAY: Buy the WYNN October 70 Puts (UWY VN) at or under $4.10, good for the day. Place a protective stop limit at $2.50 and a sniper sell at $6.00.

PLAY: If the MOS October 50 Puts (MOS VJ) trade at or above $3.70 for the remainder of the day, lock in your profits.

Dear Bottarelli Research Member,

We have an interesting situation on our hands with Wynn Resorts (WYNN – NASDAQ).

As you probably know, WYNN is getting set to launch Wynn Macau in Hong Kong, which is expected to be the fourth-largest global IPO of the year. In anticipation of this launch, shares of WYNN have been aggressively rallying to the upside. But now, a few obstacles are emerging.

WYNN

First, several new Hong Kong IPO’s have gotten clobbered lately, which makes investors question whether WYNN’s desired IPO price range of HK $8.52 to HK $10.08 will hold up. At the same time, shares of WYNN are failing at the $75 level, which has acted a ceiling in recent trading. Add it all up, and the threat of further losses on WYNN is now the prevailing trend. Let’s profit off any dips using puts.

PLAY: Buy the WYNN October 70 Puts (UWY VN) at or under $4.10, good for the day. Place a protective stop limit at $2.50 and a sniper sell at $6.00.

At the same time, let’s use today’s sharp market reversal to lock in profits on our MOS October 50 Puts (MOS VJ). We entered these puts yesterday for $3.10 and they briefly hit a high of $3.70. Currently, they’ve dipped back to $3.50. But for the remainder of the day, consider this your advice: If these puts trade at or above $3.70, don’t wait for my signal. Consider this your exit alert and lock in your profits!

MOS

PLAY: If the MOS October 50 Puts (MOS VJ) trade at or above $3.70 for the remainder of the day, lock in your profits.

And as always…

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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