Call Traders Target Netflix Stock After Video Game Acquisition

Benchmark raised its price target in response to the news

Deputy Editor
Sep 29, 2021 at 10:11 AM
facebook twitter linkedin

In an attempt to diversify its revenue stream, Netflix Inc (NASDAQ:NFLX) announced that it bought videogame maker Night School Studio, best known for the supernatural-themed video game "Oxenfree." In addition, the company has rolled out five mobile games in select European markets, which, alongside the studio's games on the PlayStation, Xbox, Switch, and PC, will be included as part of a Netflix membership.

At least one analyst has made their optimism known, with Benchmark hiking its price target to $493 from $448. The brokerage bunch was already bullish heading into today, with 23 of the 29 rating the security a "buy" or better. Plus, the 12-month consensus price target of $617.12 is a 3% premium to current levels. 

Options traders have also rarely been more bullish. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), Netflix stock sports a 50-day call/put volume ratio of 2.24, which stands higher than 88% of readings from the past year. This means long calls are being picked up at a quicker-than-usual clip.

That penchant for bullish bets is prevalent in today's options pits, too, with 47,000 calls crossing the tape already -- volume that's double what's typically seen at this point. Most popular by far is the weekly 10/1 600-strike call, where new positions are being bought to open. 

Netflix stock was last seen 2.3% higher to trade at $597.07. The security recently pulled back sharply from its Sept. 8, all-time high of $615.60, though the stock's 20-day moving average has managed to capture most of this selloff and guide shares back up the charts. The security is pacing for its second-straight monthly win, and is up 11.7% in 2021. Longer term, the equity is up 22.5% year-over-year.


If you are not making money with options, you aren’t buying options like this…

There is no options strategy that more perfectly approaches trading the fastest moving and most volatile stocks available in the marketplace than this one. In fact, there is no strategy that better utilizes put options for optimal returns and a real trading edge over other traders in the exact same market. New options traders fail out at an incredible rate without proper trade research, execution timing, and option picking. Capitalize on Schaeffer’s 100+ years of options trading excellence with the most coveted product launch in company history. Don't waste another second... join us right now before the next round of trades are released!



Special Offers from Schaeffer's Trading Partners