The gaming giant comes into Thursday afternoon's report down nearly 4% in 2020 despite a 5% run higher over the last week. Other casino stocks, such as MGM and Las Vegas Sands, haven't started the year on a good note either, but Wynn remains the worst performer of the three so far thanks to its Macao exposure amid the ongoing outbreak.
However, if the bulls are right, Wynn could be on the verge of flipping the script in 2020.
As OptionsPlay chief strategist Tony Zhang pointed out Wednesday on "Fast Money," the options market is implying a post-earnings move of more than 6% in either direction. That dwarfs the 2.7% average move the stock has made following its last four earnings reports.
"I think this reflects the market's fear on the coronavirus and [Wynn's] exposure in China," said Zhang.
One trader is taking the other side of that bet, though, and sees a strong earnings report doing much more for Wynn than a typical post-earnings bounce.
"What we saw earlier was a fairly large 806-contract risk reversal trade," said Zhang. "The seller sold March 20 110-puts, which are fairly out of the money, for $1.73, and used that premium to pay for a March 150-call, which also is fairly far out of the money, for $1.78."
The way this trade works, Wynn will have to move at least 14% higher between Wednesday's close and Mar. 20 expiration for this trader to break even on their bet. However, they won't see any losses unless Wynn plunges at least 9%.
As Zhang explained, though, there is plenty of time between now and Mar. 20.
"Before expiration, the trade acts pretty much like a stock. So, this trader has a notional stock value of about $3.5 million, while putting just a small amount of capital at risk to take this long stock exposure going into earnings," said Zhang.
Wynn was trading about 1.5% higher in Thursday's session.