A couple weeks back, Dan Nathan of CNBC's Options Action and of RiskReversal.comsuggested a bearish bet on Casino giant Wynn Reports .
This trade did not come lightly to him.
In fact, Nathan's negative view of the stock was the result an exhaustive, on-the-ground research campaign that included several pricey dinners and a Garth Brooks show (he also thought Chinese GDP would provide a negative catalyst, but let's not get too technical).
He expressed his view by purchasing a put spread. His trade and breakdown are below.
DAN'S WYNN OPTIONS TRADE:
HOW DAN'S WYNN TRADE MAKES MONEY
At first, the trade seemed a sure loser, but just like Vegas, luck can change in an instant. Disappointing earnings have sent shares of the casino giant sharply lower. And now the only thing working against the trade is time, with October expiration coming tomorrow. So what to do now?
Said Nathan: "Technically, it is one of the worst looking charts I've seen with a massive head and shoulders formation. I'd close out this trade and roll it out to either December or January."
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