netflix earning play?

Discussion in 'Options' started by newguy05, Oct 15, 2010.

  1. With netflix at $155, i did the following positions at $500 per 10x contract.

    20x oct 22 135/140/145P fly
    10x oct 22 160/165/170C fly

    if the expectation is a big move after earning i think this is better than a straddle since i wont have to deal with the IV drop after earning, and the loss is limited compared to straddle's premium. The downside is you have to pretty damn precise with the strike picking vs the straddle.

    What do you guys think? how would you play the netflix earning if expecting a move after announcement.
  2. gobar


    goes up.. touches $170... and down from there...
  3. Saoleo


    I think NFLX doesn’t move in this time.

    SELL -1 2/-2/1/-1 CUSTOM NFLX 100 NOV 10/NOV 10/NOV 10/NOV 10 165/175/150/140 CALL/CALL/PUT/PUT @9.32 LMT
  4. spindr0


    I think that your upside is problematic because with twice as many puts as calls, the put debit is going to prevent an upside profit unless you're in the upside sweet spot range *AT* expiration.

    With a more balanced position, you'd have a chance to profit in either profit zone the AM after the EA.
  5. looks like i should done it as 1:1. bad news this pig gapped instead of crashing, good news it stopped around 165, right in my 160/165/170 fly in afterhours. Guess i have to monitor this tomorrow to see what's going on.
  6. gobar


    they missed but still NFLX is going up...u know y? another trap like crox

  7. spindr0


    Double flies for an EA are like trying to do precision bombing from 10,000 feet on a cloudy night without radar. You need the underlying to move only an exact amount in either direction. That's a tough one. IMO, a better choice is something where the larger the move, the better the tails do.

    Luckily, it's just outside your upper fly so if you get a pullback, you might have a chance to nab a small profit from this. Good luck.
  8. hajimow


    NFLX market cap is up over 1.3 BILLION in just a day. 1.3 BILLION. I cannot even say it.
  9. Short now.
  10. hajimow


    I don't play NFLX. I am just watching it but it will collapse and it will collapse so bad. Sooner or later. It is a $70 stock max.
    #10     Oct 21, 2010