Option Volume Picks Up as Netflix, Inc. (NFLX) Slides

Netflix, Inc. (NFLX) calls and puts are both accelerated today


Published on Mar 9, 2015 at 12:19 PM
Updated on Apr 20, 2015 at 5:32 PM

Since the start of the year, Netflix, Inc. (NASDAQ:NFLX) has added over 30%, thanks to an earnings-induced bull gap on Jan. 21. Today, though, the shares are lower, dropping 1.9% to hit $445.53. In NFLX's options pits, overall option volume is accelerated, as traders place bets on both sides of the aisle.

The most popular contract overall is the weekly 3/13 460-strike call, which it appears as if some traders are buying to open. These speculators are looking for NFLX to rebound from today's losses and eclipse $460 by the close on Friday, when the options expire. Other traders aren't as hopeful toward the shares, with buy-to-open activity detected at the in-the-money weekly 3/13 450-strike put, as traders look to profit on a move further below $450.

Call buying has dominated NFLX's options pits in recent months. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock's 50-day call/put volume ratio of 1.07 is only 8 percentage points from an annual extreme.

Elsewhere, sentiment is more mixed. Currently, 14 covering analysts rate Netflix, Inc. (NASDAQ:NFLX) a "buy" or better, while another 14 call it a "hold" or worse. Meanwhile, its average 12-month price target comes in at $445.51 -- roughly in line with present trading levels.

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