How To Earn 8.2% Yield While Waiting to Buy WYNN 30% Cheaper
At about $125.02 a share, Wynn Resorts (WYNN) is trading about 6.1% below its 52W high.
Do you think WYNN stock is a good long-term bet at current levels? What about at a 30% discount at about $85 per share? If you think that is a steal, and have some cash ready to go, here is a trade.
8.2% annualized yield at 30% margin of safety, by selling Put Options.
- Sell a long-dated Put option expiring 12/18/2026, with a strike price of $85
- Collect roughly $350 in premium per contract (each contract represents 100 shares)
- That’s about 4.2% annualized yield on the $8,500 you’re setting aside for the possibility of buying the stock
- This cash parked in a savings or money market account will earn an extra 4.0%, taking total yield to 8.2%
- And you give yourself a chance to buy WYNN stock at deep discounted price of $85
However, this is not the only stock strategy in town. Trefis High Quality Portfolio is a sophisticated framework designed to reduce stock-specific risk while giving upside exposure.
Possible Trade Outcomes: You Win Either Way
| Stock Price Outcome | What It Means For You |
|---|---|
| WYNN stays above $85 | You keep the full $350 premium – 4.1% extra income over the next 359 days on cash that might otherwise earn you 4.0% or less. You never buy the stock and simply walk away with the cash. |
| WYNN closes below $85 | You’ll be obligated to buy 100 shares at $85. But thanks to $350 premium, your effective cost basis is just $81.5 per share – a roughly 35% from current level. |
But to hold this trade with conviction, you want to see long term upside in the stock. Because if it comes to it, you want to be excited about buying the stock cheap.
First, you want fundamentals to check out. For details, see Buy or Sell WYNN Stock or check Wynn Resorts Investment Highlights
Second, you want to better understand competitive advantage and industry tailwinds. Below is what specifically gives us the conviction.
Why Hold WYNN Stock Long-Term
Wynn Resorts operates as a preeminent brand in the luxury integrated resort sector, demonstrating a wide moat through significant pricing power and brand loyalty. The company is poised to benefit from a strong, double-digit CAGR in the global casino gaming market, driven by secular tailwinds in experiential and luxury travel. Its strategic focus on high-end consumers provides resilience, and expansion into new markets like the UAE presents long-term growth opportunities. We are comfortable owning this ‘best-in-class’ asset if assigned, as its brand strength should facilitate value compounding over a 5+ year timeline.
Competitive Advantage
We classify WYNN’s economic moat as WIDE, with the primary source being Pricing Power
- Demonstrated pricing power by maintaining room rates approximately 50% higher than its nearest competitors in Las Vegas during peak events like Formula One.
- Management has indicated a strategy of upholding brand premium and rates rather than offering discounts during weaker market periods, suggesting inelastic demand from its luxury clientele.
- The ‘Wynn Rewards’ loyalty program creates switching costs through a tiered system with escalating benefits, incentivizing repeat business.
- Consistently recognized on FORTUNE Magazine’s ‘World’s Most Admired Companies’ list, receiving the highest ranking for a casino resort in 2025 for the 17th year.
See Wynn Resorts Full Analysis.
Industry Tailwind
The industry tailwind is STRONG, with CAGR projection of 11.38% (Source: Mordor Intelligence)
Secular Trend: Growth of Global Luxury & Experiential Travel
Key Risks: Geopolitical and regulatory uncertainties associated with its Macau operations, given the reliance on the Chinese market and tense U.S.-China relations.
Financial Guardrails
Cash Generation: Positive Free Cash Flow
Balance Sheet: As of the latest reports, Wynn Resorts has a significant net debt position, with approximately $12.20 billion in total debt and $1.96 billion in cash. While the debt is substantial, the company’s strong cash flow and liquidity position of $4.6 billion (including available revolvers) mitigate immediate bankruptcy risk.
Not comfortable with options or stock-specific trades? PORTFOLIOS are even better.
Portfolios Beat Stock Picking
Individual stocks are unpredictable. A smart portfolio keeps you invested, limits downside shocks, and provides upside exposure
The Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming its benchmark that includes all 3 – the S&P 500, S&P mid-cap, and Russell 2000 indices. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.