An Options Play for Netflix

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July 22 (Bloomberg) -- IUR Capital Managing Director Gareth Ryan discusses Netflix and his investment ideas with Dominic Chu on Bloomberg Television's "Market Makers." (Source: Bloomberg)

Thank you for joining us.

Let's talk about what you see for netflix today.

What we are looking at is, as you mentioned, a 14% move on the underlying security after the earnings this evening.

We see that as expensive in terms of the front month expiring.

We will talk about a strategy that can benefit from any upside in the security, and also any neutral or dead fish reaction.

So what kind of strategy are we talking?

Mildly bullish.

What is the call?

We are looking at something for the september expiration, on the put spread side, we want to sell this.

We are looking at the 2-10, 2- 15 puts bread, about $1.20 credit.

You are selling it, so you only benefit if the stock stays where it is war goes higher.

You are not making an out what call, or else he would have bought bullish call options.

Yes, we are not try to be that aggressive, despite the fact of the previous two or earnings have been huge in terms of the moves that we saw after earnings.

We are looking to be more conservative and benefit, provided they have a higher strike price on the put spread.

Is there a situation where you would take the trade off between now and expiration?

If we saw a huge disappointment on earnings or a correction on the bullish trend that we saw in recent months, the new book to exercise some risk.

We are giving up a lot of premiums between $1.20 credit and the maximum.

Thank you so much.

This text has been automatically generated. It may not be 100% accurate.


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