We bought June 75/85 call spread on March 16 for $3.15 when the stock technically broke out. We sold half on April 5 for $5.40 taking in nice chunk of profits. The stock has continued to perform and the spread has gone fully in-the-money trading above $87/share. The spread has expanded further to $6.75.
Just an hour ago, a boutique firm Buckingham downgraded LVS from Buy to Neutral on extended valuation. Before that downgrade came in, we had already closed the entire position in LVS (see my housekeeping note earlier today).
I think this downgrade could hit other casino stocks. Therefore, I am closing the remaining half of WYNN call spread for $6.75 or approx 110% profit. After this trade, I have now fully exited all positions in casino stocks.
Booyah!
About Me
- Fahad Khalid
- Chicago, IL, United States
- I have Masters in Business (Accounting and Finance 2003) from Michigan State University. I have been trading the market since 1998. Prior to picking up trading as a full-time career in 2008, I was a management consultant at Alvarez & Marsal and Conway MacKenzie for four years. I provided turnaround, crisis management and restructuring services to financially distressed firms. Prior to working in turnaround, I worked in Audit & Assurance at Deloitte & Touche for two years. Trading in the market has always remained my side business ever since I started college. 90% of the time, I trade through options. I love volatility skews and positive Theta plays. While I make a lot of directional bets, in general my favorites are to take advantage of high implied volatilities through calendar or butterfly spreads and vertical credit spreads. I never buy straight calls or puts and I do a lot of exotic multi-leg option trades.
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