Netflix stock options are priced for a big post-earnings move, but not as big as usual
Options on shares of Netflix Inc.
NFLX,
is priced for a near double-digit move on Friday, following the video streaming company fourth quarter results report will be released after the closing bell on Thursday. An options strategy known as a straddle, is a pure volatility game that involves buying bullish (call) and bearish (put) options at the same price, priced for a one-day post-earnings change of $31.20, or 9.7%, in both directions, according to data provided by Matt Amberson, principal at Options Research & Technology Services (ORATS) ). That’s lower than the median post-earnings move over the past 12 quarters of 34.52%, or 10.7%, Amberson said. Based on current prices – the stock fell 1.2% to $322.44 in Thursday afternoon trading – a standing buyer will start making money if the stock closes on Friday below 291.24 dollars or more $353.64. According to FactSet data, over the past 12 quarters, the stock has risen more than 9.7% just three times. Additionally, the stock rallied after the results for the past two quarters, but fell after nine of the past 12 reports. Shares are up 18.4% over the past three months, while the S&P 500
SPX,
rose 6.0%.