Speculators are gambling on more short-term upside
Casino stocks are mostly higher today, thanks to the latest data out of gambling enclave Macau. Specifically, while Macau revenue fell 0.4% year-over-year in March, it was the biggest month of 2019 and was in line with expectations. In addition, optimism about U.S.-China trade relations is also likely boosting stocks with exposure to both countries. Against this backdrop, Wynn Resorts, Limited (NASDAQ:WYNN) shares have gapped higher today, and WYNN options are trading at an accelerated clip.
WYNN stock was last seen 7.5% higher at $128.32, and on pace to conquer its 200-day moving average for the first time since June. Further, the casino name is set for its biggest single-session gain of 2019. However, the security could find a familiar wall in the $130-$131 area, which stifled WYNN's rally attempts last month.
So far today, about 15,000 calls and 9,000 puts have traded on WYNN -- roughly two times the average intraday volume. Most popular is the weekly 4/5 130-strike call, and the April 135 call, where it looks like traders are buying the options to open. If so, the weekly call buyers expect WYNN to top $130 by Friday's close, while the April 135 call buyers expect the stock to be north of $135 by expiration on Thursday, April 18.
Today's appetite for bullish bets is just more of the same, though. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock's 10-day call/put volume ratio of 3.30 indicates traders have bought to open more than three Wynn Resorts calls for every put in the past two weeks. What's more, this ratio is in the 94th percentile of its annual range, pointing to a bigger-than-usual call bias among buyers of late.