NFLX – Netflix, Inc. – The provider of DVD-rental-by-mail service received a vote of confidence by one option strategist observed dabbling in July contract calls in the first half of the session. Netflix shares are up 0.76% to trade at $125.58 by 1:10 pm (ET) after earlier rallying 2.5% to an intraday high of $127.80 in morning trading. It looks like one bullish investor opted to roll a long call position to a higher strike price in the July contract. The trader appears to have sold 2,000 calls at the July $130 strike for an average premium of $5.78 each in order to buy the same number of calls at the higher July $135 strike for $3.98 apiece. The transaction, without knowing how much the investor initially paid to purchase the July $130 strike calls, results in a net profit of $1.80 per contract. The new long call stance prepares the responsible party to accrue added profits if NFLX shares surge 5.6% over today’s high of $127.80 to exceed $135.00 ahead of July expiration.
Affiliation: Interactive Brokers
Andrew Wilkinson is the senior market analyst at Interactive Brokers Group, where he provides daily commentary and analysis on U.S. equity options trading throughout the trading day. Andrew provides webinars designed to explain option-related trading scenarios covering futures, fixed income, forex and equities.
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