Netflix Options Traders See 13% Stock Rally

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This intrinsic volatility is more so pronounced during any major news story i. Bergius trading options a result of the nosebleed valuation and volatility, in my opinion, options go hand-in-hand when committing capital to Netflix stock. Netflix is high growth stock thus investors are willing to pay a premium for this growth. Due to its rapid growth, expanding original programming, wrestling market share away from big cable companies, expansion into international markets and its overall ubiquity, it's easy to see why investors are willing to pay a premium for this media disruptor.

Due to these aforementioned factors, an options strategy may be an effective way to leverage and hedge this high growth stock while mitigating risk. Netflix offers high yielding premiums on a bi-weekly or monthly basis whether one owns the stock or attempting a good bergius trading options point.

I provide my real life examples embedded around trading Netflix and its intrinsic volatility. I utilize options to extract additional value out of positions in addition to mitigating risk.

I earmark a portion of my portfolio solely for options trading in more volatile stocks. The empirical example demonstrated here is part of my overall options strategy. I do not want to misconstrue readers into the belief that options are trivial in any sense. To contend with this volatility, one can leverage his stock or cash position via writing option contracts to mitigate these swings while remaining long or establishing an entry point in this volatile stock. Table 2 - Realized bergius trading options expressed net of fees for the covered call contracts.

This equates to a realized Details from each option contract can be seen below in Table 3. Table 3 — Details of each option contract over the past six months. This bergius trading options stated, yields a situation where I sell a put option and receive a premium in exchange for the obligation to buy the shares at a specified price by a specified date.

Alternatively, if the shares are not assigned I will have made a 9. If the shares are assigned then Bergius trading options will begin to write covered calls against these shares as I did before.

However, I was writing this option at risk due to the increased uncertainty surrounding the upcoming earnings report. The earnings report would bergius trading options move the stock up bergius trading options down in a dramatic move. I wanted insurance in the event the report turned out to be negative and fortunately for me this strategy worked out well. As a result of the nosebleed valuation and volatility, in my opinion, options go hand-in-hand when deploying capital into Netflix stock.

The author has no business relationship with any companies mentioned in this article. He is not a professional financial advisor or tax professional. This article reflects his own opinions. This article is not intended to be a recommendation bergius trading options buy or sell any stock or ETF mentioned.

Kiedrowski is an individual investor who analyzes investment strategies bergius trading options disseminates analyses. Kiedrowski encourages all investors to conduct their own research and due diligence prior to investing. Please feel free to comment and provide feedback, the author values all responses.

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