Netflix has bounced off its February lows and has cleared a key trendline
Netflix Inc (NASDAQ:NFLX) stock is up 1.4% this morning to trade at $100.05, after Goldman Sachs upgraded the streaming giant to "buy" from "neutral." The brokerage firm also hiked its price target to $120 from $100, citing an upbeat risk/reward profile.
NFLX is now testing $100, an area that thwarted a breakout attempt in early March. The stock is up 5% year to date, and on Friday cleared its 126-day moving average for the first time on a closing basis since October. The shares are up 33% off their Feb. 23 multi-year lows of $75.01.
Options traders have been bullish, per the stock's 50-day call/put volume ratio of 2.17 at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which sits higher than 76% of annual readings.
Calls are already running at double the average intraday pace today, with 133,000 across the tape in the first hour of trading. Most popular are the weekly 4/25 100-strike call and weekly 4/10 100-strike call, with positions being sold-to-open at the former.
Options are affordable, per Netflix stock's Schaeffer's Volatility Index (SVI) of 49% that ranks higher than 16% of all other readings from the past year. In other words, near-term option traders are pricing in relatively low volatility expectations.