Stock / Symbol: Netflix / NFLX
Option Strategy: [private_monthly]bear call spread[/private_monthly];
Price at trade post: $182;
Reasoning: Although the standard deviation calculation for March expiration puts NFLX in an upward range to [private_monthly]$217, I think that NFLX is going to stall out for a while as it's now up over 68% since it's blow-out earnings report on Jan 23rd. I'm playing my thesis with a bear call spread, selling the March 210 calls, covering with the 215 calls[/private_monthly]. The trade's greeks are: -7.6 delta, 2.2 theta, and -3 vega. The probability of success on this trade is 75%. If NFLX trades [private_monthly]up to $202, we'll either stop out of the trade or adjust it.[/private_monthly]
Trade Details:[private_monthly]
STO -2 NFLX Mar13 210 calls
BTO 2 NFLX Mar13 215 calls
for a min net credit of $0.90 per contract. (day order, limit order). The current mid is $.90. Try for mid less .05. If not filled today, ok to try again tomorrow.
Requirements:
Cost/Proceeds ($180)
Option Requirement $820
Total Requirements $820
Estimated Commission $6
[/private_monthly]
Max Risk: $820
Max Reward: $180 or 21%[private_monthly] between $0 and $210[/private_monthly] by Mar 15[private_monthly]
Profit Range: 0 to $210 by Mar 15
Suggested Upside stop: @ $202
Suggested Downside stop: NA
[/private_monthly]
Non-members, click here for access
