Steve Wynn is the CEO of Wynn Resorts (NASDAQ:WYNN). Over the course of his career, he and his various companies built such landmark Las Vegas hotels as Mirage, Treasure Island, Bellagio, Wynn, and others. Revenue for Wynn Resorts was over $5B, and Wynn’s personal net worth is over $4B.
Of course he is obviously successful and that success can be attributed to a number of characteristics. But the one key to his success and to his amassing a glittering $4B fortune is something that you can do too. His secret? He stacks the odds at his casinos in his favor.
It’s what casinos do. They create a game where there’s a chance that the player will win a bunch of money. But statistically, over time, the players will lose, and the casinos will win. If enough people play enough games, the people will lose and the casino and Steve Wynn will win.
Take roulette, as an example. In roulette, there are 36 red and black numbers around the roulette wheel. If you guess where the marble lands when the dealer spins the wheel, you will receive 36 times your wager. If you bet $10, you will walk away with $360. If you walk away. Chances are, you won’t. Steve knows that.
But there’s a problem. There are also two green numbers on the wheel. So the odds of the marble landing on 7 red are 1 in 38. And if it does land on 7 red, you get paid 36 times your money. So statistically, the casino will eventually win. For example, if customers make 380 bets of $10, chances are there will be 100 winners who will get a total of $3600. The casino will get the rest, $200. Every hour of every day, that table puts $200 in Steve Wynn’s pocket. He has a lot of tables.
“But what does this have to do with me?” I hear you ask.
If you have traded stock options, chances are you bought a long call option on a stock you thought would go up. If the stock went up quickly, you won. But if the stock went down or even if it went up a little, you lost.
But what if you could trade stock options like Steve Wynn, with the odds stacked in your favor.
What is this magic investment? It’s a stock option trading strategy called a credit spread. It is created by buying and selling related stock options in the same option expiration period.
What do the professional options traders do? They sell credit spreads. By being a net seller of options, you are feeding the cravings of the gamblers. The professionals trade “with the house” – with the odds in their favor.
If you trade like a business—like you are running a casino, instead of like the schmuck at the tables with a whiskey in one hand and a cigarette in the other—you will be a winner. Maybe not as rich as Steve Wynn, but you’ll be heading in the right direction.
You can learn how I trade credit spreads with the house in a free special report. There’s no obligation, just free information. Download my report: How I Target 3-5% Per Month Even When My Stock Goes Down right now.