It is a beautiful Thursday morning and I am excited about the possibilities that options trading brings today. Enter, Netflix Inc. (NASDAQ:NFLX). Netflix with its market capitalization of $38.02 billion is a provider of Internet television network. The Company has over 57 million streaming members in over 50 countries. Its members can watch more than two billion hours of television (TV) shows and movies per month, including original series, documentaries and feature films on Internet-connected screen.
Previous NFLX Coverage
On January 21, I wrote about trading the options of Netflix in a post titled, Buy NFLX Calls: Netflix is soaring on Impressive Q4 Result. In that post, I discussed the company’s impressive fourth quarter results. I mentioned how the company beat the analysts’ consensus estimates in its top and bottom lines. I also talked about how the company was increasing its subscriber base to outperform its guidance and the consensus estimate.
I then gave the stock a $476 price target in six months when I recommended that you buy the NFLX Jul 2015 450.000 call (NFLX150717C00450000) available at an asking price of $26.00.
Performance in Six Months
In the six months since the initial coverage on Netflix options, the bullish side has being recording impressive gains. As at market close yesterday the shares of Netflix had gained a fantastic 3.18% to close at a $647.15 trading price. More so, the stock has gained 1.25% to an opening price of $655.22. In essence, the shares of Netflix have gained a colossal 43.81% from a $450 trading price in January to the current $647.15 trading price.
The call options contract that I recommended has delivered incredible result in six months. The contract has gained an unbelievable 568.85% from an asking price of $26 to the current asking price of $173.90. A 500% gain in six months is more than enough reward for bullish plays on Netflix options; hence, I recommend selling to close the contract and running with your gains.
New Coverage on NFLX Options
Netflix is working towards increasing its target audience in a bid to make up for slowing growth in its U.S. markets. News has it that Netflix is bringing on Spanish content that will appeal to the fast-growing Hispanic demographics in the United States. Netflix has already partnered with Telemundo, Univision and other Latin American content creators to provide a rich content offering for the Hispanic audience.
In fact, Netflix has already included Spanish contents such as the “La Reina del Sur”, “El Señor de los Cielos” and “La Familia P. Luche,” and “El Chapulín Colorado” in its offerings.
In another news, Netflix is showing strong bullish signals after announcing that it has put up $30 million for Brad Pitt’s War Machine. According Ted Sarandos, head of content at Netflix, War Machine is a rip-roaring, behind-the-facade tale of modern war decision-makers, from the corridors of power to the distant regions of America’s ambitions.”
How to Trade NFLX Options
The bullish sentiment on Netflix remains strong and I am bullish on NFLX options. I recommend buying the NFLX Dec 2015 650.000 call (NFLX151218C00650000) at an asking of $67.66.
— Daily Option Alerts