NFLX Earnings trade
NFLX reports their quarterly earnings on Monday Oct 16th after the market closes. One interesting speculative play is to add a small out of the money call fly that can work if NFLX has an up move after the earnings release.
Currently it looks like the expected move by the market-makers is about $16. With NFLX trading around $196, I would enter the following trade:
OCT 20th Expiration
Buy 1 200 call
Sell 2 210 calls
Buy 1 220 call
Enter as a butterfly spread for around $1.50 per spread
The trade is profitable on expiration from about $201.50 to $218.50. Close at whatever profit you can get on Tuesday Oct 17th.
Mark Fenton
mark@sheridanmentoring.com
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