NFLX – Netflix, Inc. – Bullish players are dominating options trading on Netflix today with shares of the provider of DVD-rental-by-mail service jumping up 3.9% to secure an intraday- and new 52-week high of $137.45. Investors placed bullish bets on NFLX by selling puts and buying calls in the August contract. Optimists expecting shares of the underlying stock to exceed $120.00 through August expiration sold 1,300 puts at the August $120 strike for an average premium of $0.35 each. Put selling spread to the higher August $130 strike where some 1,500 puts were sold at an average premium of $1.77 a-pop. Finally, bulls hoping shares in NFLX are set to trade above $135.00 through expiration day this month sold roughly 1,700 puts at the August $135 strike to pocket premium of $3.85 per contract. Put sellers keep the full premium received as long as shares are trading above the strike prices described through expiration day. Bulls itching for continued appreciation in the value of Netflix shares purchased at least 1,400 now in-the-money calls at the August $135 strike for an average premium of $3.96 each. Traders long these contracts make money if shares rally above the average breakeven price of $138.96 ahead of expiration day. Options players positioning for a more dynamic upward shift in share price picked up approximately 1,500 calls at the higher August $140 strike for an average premium of $1.98 apiece. Shares of the underlying stock must increase another 3.3% over today’s high of $137.45 in order for August $140 strike call buyers to start to profit above the average breakeven price of $141.98. The overall reading of options implied volatility on NFLX increased 5.2% to 57.76% by 1:40 pm ET.
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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