Wynn

[New-born baby]

Strike prices are not adjusted for an ordinary dividend.

Dave is correct.

I've seen dogs like WYNN and FRO. Big divys. Big hits once the divy payout hits the market. Shorting the stock is risky. PUTS are too expensive. WYNN will fall much more than the $6. In fact I assume the last couple of days before the ex-date will be down days. Lots of folks are jumping on board now simply for a quick ride up, but they'll leave the train before the ex-date. A naked call sold the day before the ex-date is the safest play. And it'll have to be out of the money or else they will call you on it as soon as it becomes breakeven for them.

[lemonjello]

Is $6 an ordinary divy? I've seen the option rules at one point on this, I'm guessing they will be adjusted by exchange. I'm sure a call to a reputable option broker would give you the answer post haste.

Strike prices are not adjusted for an ordinary dividend.

Strike prices are not adjusted for an ordinary dividend.

[lemonjello]

Wouldn't everything be adjusted down for the divy? If you have to pay the divy and the stock moves down and the option strikes are all adjusted down $6 by the exchange you would be in the same position as before except you would be up 6k on the short which you would eventually have to kick out. The original 3k lock would still be in tact.

Short sellers of stock owe the dividend, if short on the record date.

Short sellers of stock owe the dividend, if short on the record date.

[lemonjello]

Najarian? 'nuf said.

Just looked at the option chain the puts are fat and the calls are thin. LOL. That just tells me you should be selling the puts and buying the calls and that most of the people are usually wrong.

If you've got cash laying around you could short 1000 shares and sell Dec 90 puts against it / buy the Dec 90 calls and come out about 3k ahead in 30 days on about 50k margin or about 6% return on one month on virtually no risk assuming there would be no net effect from the dividend adjustment (not sure if that's true since the div adj on options for big div has special rules.)

Thoughts?

Lemon,
One way to scan for stocks moving up is looking for the cheapest puts around. When I say "cheapest," I mean lowest cost per dollar value. The vice versa works, too. Here we have a high dollar stock, WYNN, at $93+, and the option for $90 DEC call (more than one month away) sports a tiny time value of $.90. It is the cheapest time value you can buy in the entire market at this time: no exceptions. So it signals that nobody believes WYNN is going to be worth $90 on the third Friday in DEC.

Does the system work? Why of course! People make money selling this info to suckers, er, customers. Ever heard of Dr. J? Of "Stockoptions.com?" How about the world famous "heat seeker" options plays? No? Then click HERE

[New-born baby]

Are you saying WYNN is going up or down?

What's valuation are you talking about? Do you trade that theory? Does it make money?

Lemon,
One way to scan for stocks moving up is looking for the cheapest puts around. When I say "cheapest," I mean lowest cost per dollar value. The vice versa works, too. Here we have a high dollar stock, WYNN, at $93+, and the option for $90 DEC call (more than one month away) sports a tiny time value of $.90. It is the cheapest time value you can buy in the entire market at this time: no exceptions. So it signals that nobody believes WYNN is going to be worth $90 on the third Friday in DEC.

Does the system work? Why of course! People make money selling this info to suckers, er, customers. Ever heard of Dr. J? Of "Stockoptions.com?" How about the world famous "heat seeker" options plays? No? Then click HERE

[lemonjello]

Are you saying WYNN is going up or down?

What's valuation are you talking about? Do you trade that theory? Does it make money?

Do you realize that WYNN has the cheapest options of all the stocks in the option universe? Interpretation: nobody believes this one is going much higher.

[New-born baby]

Bailed on WYNN a few hours ago after a nice ride.

It's still got crazy potential minting money in its Macau operations. I'll wait for now.

Do you realize that WYNN has the cheapest options of all the stocks in the option universe? Interpretation: nobody believes this one is going much higher.

[lemonjello]

Bailed on WYNN a few hours ago after a nice ride.

It's still got crazy potential minting money in its Macau operations. I'll wait for now.

[New-born baby]

QUOTE=rrrhumba;71871]I agree with NBB and StkyTreat on this one. I think you would be setting yourself up for an assured loss as the price will be adjusted and the "agile" bail out pre-divy. This isn't just a nice pop in the price. It's a very out of the ordinary move. What ever the price was before the divy announcement, that's where it will be before the average investor can get his money out.
Playing the short sounds like a good idea.
rrrhumba[/QUOTE]


And the short would be to SELL the DEC out of the money calls. Right now, the DEC $90 call is selling for only $.90 more than the stock price, while the put is outlandish! The $90 PUT is a whopping $5.40. That means that if you bought the stock here at $93.50, and then paid $5.40 for a $90 put, you'd be in the hole $7.80 per share just to get $90 back when the ex-divy comes.

The best play is to sell the out of the money calls for NOV or DEC or JAN and let WYNN eat dirt.

Wynn

I agree with NBB and StkyTreat on this one. I think you would be setting yourself up for an assured loss as the price will be adjusted and the "agile" bail out pre-divy. This isn't just a nice pop in the price. It's a very out of the ordinary move. What ever the price was before the divy announcement, that's where it will be before the average investor can get his money out.
Playing the short sounds like a good idea.
rrrhumba

[alice4321us]

Not Sure

From my reading and what I was asking when ALJ was paying an ex-dividend back in August.

For Wynn, you have to purchased the stock by November 21 (Tuesday) and hold it through December 4th to get the $6 dividend per share. So on the day of the paid dividend, what ever the closing price was for December 1 will be offset by minus $6 for December 4 (Monday) opening price.

I think most people will drive the prices up for the new comers and they will exit without taking the dividend. But I could be wrong….anyone?

http://smartdividend.com/?p=206

I am not sure if that is true, I have held stocks for a day or two to get the dividend and then gotten out. I think you Hold WYNN on Nov 23 and get the divy.

[JohnHenry]

From my reading and what I was asking when ALJ was paying an ex-dividend back in August.

For Wynn, you have to purchased the stock by November 21 (Tuesday) and hold it through December 4th to get the $6 dividend per share. So on the day of the paid dividend, what ever the closing price was for December 1 will be offset by minus $6 for December 4 (Monday) opening price.

I think most people will drive the prices up for the new comers and they will exit without taking the dividend. But I could be wrong….anyone?

http://smartdividend.com/?p=206

[skiracer]

I will wait till 22nd to buy and will seel first thing on 24th.

I would be real careful here with this one. I think it is setting up for a decent short play very soon. I would be watching it for a short side play rather than anything long right here.