NaughtyPines

WYNN -- NON-EARNINGS PREMIUM SELLING PLAY

NASDAQ:WYNN   WYNN RESORTS LTD
WYNN just had earnings about two weeks ago. Ordinarily, the volatility quickly contracts, but it hasn't in WYNN. With an IVR             of 75 and an IV of 62, I can't pass up this play.

You can naturally go with an iron condor with the same short strike prices, but I'm going with a short strangle here since I have the buying power to do it:

Dec 18th 55/85 short strangle
POP%: 73%
Max Profit: $246
Max Loss/Buying Power Effect: Undefined
BE's: 52.54/87.46
Out of the Dec 18 55/75 short strangle at 50% max.
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Rolled the 85 short call down to 75 for an additional .66 credit (same expiry), so now it's a Dec 18th 55/75 short strangle.
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An update: I originally got this filled for a 2.32 credit. The 85 call, which was originally worth a 1.33 credit, is now worth only .26. With 30 odd days left until expiry, I am considering rolling down the call side within the same options expiry to lock in current profit for that side ($133 - $26 = $107). For instance, if I roll down to the 75 strike (Dec 18th expiry), I will get an additional .66 credit and effectively convert the strangle to a 55/75 short strangle. Naturally, I don't want to roll it if price is going to whip back up into my short call (price for the underlying has been all over the place since earnings), so I may wait a few days and see how things go after this broad market sell off we've had ... .
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Unfortunately, I did not get filled. I will look at it again on Monday; if the IVR/IV's still there, I'll give it another shot.
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