NaughtyPines

THE EARNINGS PLAY TO WATCH THIS WEEK -- NFLX

NASDAQ:NFLX   NETFLIX INC
So my first earnings play this season (YUM) didn't go all that hot ... . Naturally, rolling out for duration and credit is part and parcel of the premium selling game, but like any other kid in the candy store, I just want to take my candy and go ... .

Perhaps NFLX             will be a different story. With earnings to be announced on 10/14 after the market close and with juicy IVR             (currently at 80) and IV (81), it looks to be the premium selling opportunity of the week.

I'll look to put on a play on or before market close on 10/14 via iron condor or short strangle. Here are the possible setups given current price:

Oct             23rd 88/91/135/138 Iron Condor
POP%: 70%
Max Profit: $73/contract
Buying Power Effect: $227/contract
Break Evens: 90.27/135.73

Oct             23rd 91/135 Short Strangle
POP%: 75%
Max Profit: $314/contract
Buying Power Effect: Undefined
Break Evens: 87.86/138.14

Notes: I could see some merit in shifting the setups slightly (2-3 strikes?) to the bearish side on the notion that the 2015 high is below the 130 strike. Look to take the entire setup off at 50% max profit ... .
NaughtyPines
a year ago
I probably jumped the gun a little bit on this, but got filled for a 89/92/135/138 Iron Condor for a .73 credit. Post earnings announcement, NFLX is at 107.48 in AH trading, which will be between my short strikes on open tomorrow.
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NaughtyPines
a year ago
And ... out today at 50% max profit, .37 per contract. So I'm 1-1 (NFLX a winner; YUM a loser). Naturally, the YUM trade could eventually work out, but it's clearly going to take a bit of time.
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