Market Overview

Netflix (NFLX) Is Back On Track

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Netflix NFLX Is Back On Track

Netflix, Inc. Credit Spread (Nasdaq: NFLX)

TheOptionPlayer.com sets up a Netflix (NFLX) short-term (7-day) option strategy. Investors could simultaneously:

Sell the November week-four expiration NFLX $365 call for $1.55

AND

Buy the $370 call at $.95

The difference between funds received and paid out is a $.60 per share credit which we keep if Netflix stock closes below $365 on Friday November 22nd, but immediately exit the position if it appears the price will end up higher. Another recommendation is if the price gaps higher open the trade using higher strike prices. See Guidelines page at www.theoptionplayer.com/ for explanation on how trade is set up.

 

Why we recommend it:

Over the past few months Inc. Netflix (NasdaqGS: NFLX) was set up for a series of successful trades. The Netflix chart below confirms the stock has been effectively confined to a trading range over the past few months. The only deviation from the recent trading range is the day when the intraday stock price exploded due to extreme volatility surrounding 3rd quarter earnings. A recent Netflix trade setup warned that the stock price might violate its trading range. Since that brief one day aberration Netflix shares have stabilized within its trading range. Also the momentum indicators in the chart below confirm a neutral trend as the general stock market absorbs overbought conditions and 3rd quarter earnings season winds down.We are betting that for the next week Netflix, Inc. stock will continue to trade below the $365 target.

 

52-Week High: $389.16

52-Week Low: $74.50

Average Volume (3 month):   3,635,450

The following article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.

Posted-In: Options Markets Tech Trading Ideas

 

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