Weekly Put Options Popular on Netflix Stock

NFLX shares hit an all-time high one week ago

May 22, 2017 at 11:52 AM
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The 20 stocks listed in the table below have attracted the highest weekly options volume during the past 10 trading days. Stocks highlighted are new to the list since the last time the study was run, and data is courtesy of Schaeffer's Senior Quantitative Analyst Rocky White. One name of notable interest is streaming giant Netflix, Inc. (NASDAQ:NFLX). Here's a quick rundown of how options traders are placing bets on shares of NFLX.

most active options trading

Short-Term Options Traders Put-Skewed on Netflix Stock

Going by open interest increases, the most popular weekly NFLX option during the past two weeks was the 6/2 147-strike put, and data from the major options exchanges confirms some buy-to-open activity here. This means traders are betting the stock will breach $147 before the close on Friday, June 2, when the contracts expire. However, considering this represents a 6.6% drop for Netflix stock, these options may have been purchased by shareholders looking to hedge. 

Also seeing large increases in open interest during the past 10 days were the 5/26 150-, 152.50-, and 155-strike puts. On the call side, the most popular weekly option was the 5/26 160-strike call.

On the charts. NFLX shares were last seen trading at $157.41, up 65% year-over-year, and touched a record high of $161.78 on May 15. Plus, the company last month announced a licensing deal with iQiyi to help it expand into China. If Netflix can keep rising on the charts, an unwinding of bearish options positions could further help the stock. 

Netflix Options Present Strong Buying Opportunity

But whether you're bullish or bearish, it's a great time to buy NFLX options. This is based on the stock's Schaeffer's Volatility Index (SVI) of 26%, which ranks in the low 10th percentile of its annual range. Said simply, the options market is pricing in unusually low volatility expectations for near-term Netflix options at the moment. 

 

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