Blockbuster NFLX Earnings Trade

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• Blockbuster NFLX Earnings Trade

• Blockbuster NFLX Earnings Trade
• Author Hari Swaminathan

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About OptionTiger

• Netflix (NFLX) reported blockbuster results last
  night. Topline revenues increased, and almost 5
  million global subscribers were added last
  quarter. It fell a bit short on the EPS number,
  due to foreign exchange hit from overseas
  revenues due to the strong dollar. Nevertheless
  this is a massive report.
•  
• In the EarningMAX room, we were expecting a
  bullish performance. Implied Volatility, although
  it had climbed to 130, ultimately was
  underpriced, as the expected move was 44, but
  the stock has moved over 55. An At the money
  Straddle would have worked very well, and the
  market makers went wrong on this one. 
• We put an Iron condor in the following weeks
  expiry, but to give it a bullish bias, we stuck a
  Bull Call spread inside of the Iron Condor at the
  500/505 strikes.

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About OptionTiger

• Here is our analysis of the trade idea.

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About OptionTiger

• And this morning, post the NFLX Earnings
  announcements, were looking very good on the
  trade. The Bull Put at 415/410 should expire
  worthless.
• The Bull Call spread at 500/505 should be at
  maximum profit. 
• And the Bear Call at 545/550 could expire at
  maximum profit, however, were not taking
  chances. Were getting into an aggressive
  adjustment mode to milk this trade.

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About OptionTiger

• Heres the post NFLX Earnings announcement trade
  video. This is not over yet. Weve made about 75
  profits so far, and we still have the opportunity
  to go into a triple digit return on this trade.

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