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Thursday, April 21, 2016

Netflix (NFLX) post-earnings play

4/19/2016 (9:55:01 am, PT)

sell -2 April 22, 2016  $99.50 calls at $0.71

Why did I place this trade?
  • earnings were released on 4/18
  • stock dropped on 4/19
  • I was bearish (short-term) on NFLX
  • 76% probability of success

4/21/2016 (12:58:51 pm, PT)

buy back calls at $0.05

PROFIT:  $132 (in 3 days)

Comments:
The high implied volatility of NFLX kept this call premium at $0.11 most of the day even though the stock was over $4.00 OTM with just 1 day remaining until expiration. 
The call premium finally dropped to 5 cents with just 1 minute left in the trading session.


SUCCESS!