NFLX – Netflix, Inc. – Shares of the provider of DVD-rental-by-mail service as well as unlimited access to online streaming content to its subscribers rallied 3.85% to briefly touch a new 52-week high of $119.88 this morning. The rally in the price of the underlying stock tapered off slightly by 10:50 am (ET), although Netflix shares are still up more than 1.80% on the day at $117.53. Bullish options trading activity observed on Wednesday continued today, with investors selling put options and buying calls in the June contract. Investors expecting NFLX’s shares to trade above $115.00 through June expiration sold roughly 4,000 puts at the June $115 strike to pocket an average premium of $3.26 per contract. Traders anticipating continued appreciation in the price of the stock purchased at least 1,200 calls at the June $130 strike for an average premium of $0.90 each. Shares must surge 9.2% over the new 52-week high of $119.88 before call-buyers at the June $130 strike start to make money above the average breakeven price of $130.90. The overall reading of options implied volatility on NFLX is lower by 4.00% to 62.39% as of 10:55 am (ET).
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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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