From the floor of the CME group Dan Passarelli, CEO of Market Taker Mentoring Inc. talks about a trade in Wynn Casinos (WYNN). Passarelli suggests selling the WYNN August 225, 230 call spread for $1 or better. After missed earnings, the stock did not rally and has not been at $220 per share since May. Passarelli’s trade has a solid resistance and high implied volatility, which is expected to fall. With a credit call spread, as long as the stock does not rise above the strike price it is a winner. This trade has a high statistical value and potential profit because it is unlikely to move higher than $7 in 16 days. The options are overpriced because of high volatility, so the seller makes more money. This makes the daily theta and break-even point higher.

If you liked this article you might like

Dan Passerelli High Probability Put Spread in Caterpillar (CAT)

McDonald’s Could Set Up Perfectly for Options Traders

Levels and Options Trade Review: SNDK