Friday 12:02 PM Wynn Resorts (WYNN +6%) resumes trading after this morning's shenanigans regarding its 8-K filing. Following a sharp momentary drop, the shares return to near where they were previously. Pushing the send button on the filing may have been an error, but the fact that it was prepared may mean the deal is set to go.
Friday 11:42 AM The 8-K filing by Wynn Resorts (WYNN +6.3%) saying it had an agreement with Macau for land to build another resort was a mistake and had not been authorized. "The Cotai Land Concession Contract has not been gazetted," reads the new 8-K. Shares remain halted.
Friday 11:08 AM Wynn Resorts (WYNN +6.3%) says it has accepted (8-K) the terms and conditions of the Macau government that will allow the building of a 5-star resort on the Cotai Strip. There are rumors the SEC filing was made in error. The shares remain halted from trade.
Friday 10:52 AM Wynn Resorts (WYNN +6.3%) is halted, with word about it has gotten a land concession necessary to build another resort in Macau.
Specifically, options traders who have sunk money in puts and calls (to hedge their holdings or to bet against the stock) are facing a big dilemma: Should they let potentially profitable options expire without making a profit or should they tell their brokers to act without any certainty about where the stock will again open at?
Choosing to do nothing will mean walking away from potentially extremely profitable options – especially those who own weekly options. Remember, that weekly options if not open for trading is the fastest decaying asset of all options, you will not be able to recover from. Especially, on OptionEx. They could have waited all day, to re-open WYNN. Wynn's Time-Decay would have been catastrophic on the Weekly's.
On the other hand, option traders face the dilemma that there could be a huge price swing from – the last price at which the stock traded. Any big price swing could cause havoc for any options traders who own options at the time of the halt.
Options traders are also facing the same problem with other companies that have had share halted due to halts.
Moreover, Analysts have noted that many options traders are completely unprepared should there be a halt in trading on any stock in which they are trading options on.
In conclusion
Halts are never good or predictable for the Weekly Options Trader. Never put all your dollars in one basket, as this is a high flyer and everyone wants to own it.
Check out: WYNN – Anatomy of an Erroneous Press Release http://bit.ly/wcLQI4 by kid dynamite
