Dan Nathan Sees Unusual Options Activity In Wynn Resorts

Dan Nathan spoke on CNBC's "Options Action" about unusually high options activity in Wynn Resorts, Limited WYNN.

When the stock was trading at $133, Nathan noticed that a trader bought the July 130 put and sold two July 120 puts for a total cost of $1.30. The trade breaks even at $128.70 or 3.44 percent below the current stock price. It can make a maximal profit of $8.70, if the stock drops to $120 at the July expiration. If Wynn Resorts closes below $120 at the July expiration, the trader is going to have to buy the stock at $120, but with the profit on the put spread, his entry price would be $111.30, which is 16.50 percent below the current stock price.