The PUT play was a HUGE success!!! Over 500% returns!

Wynn Resorts is a very volatile stock to trade and along with that comes big swings in option prices. This company has a history of making correct decision and has a long history of growing their company. The big question here is will the growth of the good old days come back to the US gaming capital here in Las Vegas?

I live in Las Vegas, and I keep my eye on the casino action quite a bit. There has been a lot of speculation that Vegas is saturated and permanently on the slide down and I would have to agree with this because I have seen a lot of turn over and slowing down in the locals casinos. Plus, as the Vegas unemployment rate is one of the nations highest, as well as one of the highest foreclosure states, this does not bode well for traveling enthusiasm.

The latest reports around town is that gaming revenues are up, but tourist traffic is down. In the long road viewpoint (the only one that matters in stock pricing) Vegas casinos have a very tough road to hoe in order to recapture  quarter over quarter gains of the past.

With that said, WYNN has an ace in  the hole because they are heavily invested in Macau, which has seen booming times in gambling revenues; however, this is what has become the saving grace for the stocks triple digit price, while it's competitors have remained stagnant to almost bankrupt. It's a lot of hope for investors to hang their buying hats on a company that is heavily reliant upon foreign revenue and governments that can change in an instant.

If you look at last quarters earnings, the company lost $33.5 million, but that was after they spent some $64.2 million to pay off debt—always a good thing to do. In addition to that, they actually declared a special $8 dividend that cost the company $900 million. 

When a company is struggling, its always a two edged sword to offer up profits in the way of a dividend. It's almost like buying loyalty to keep the stock price moving up, but this type of tactic, in my opinion, makes a high wall even higher in the minds of those who actually control the stock price, the large fund managers.

If WYNN does not show strong growth overseas, and an improvement in local gaming revenues and operations, then I am confident this stock could suffer a very steep decline over the next couple of quarters.

Going with weekly options on this one because good or bad earnings, there should be some movement in this stock. Depending on the overall report, I will decide what long-term options I want to place  on this stock.

PUTS

CALLS