Netflix Headed For $100 – or Lower

12:45pm (EST)

Futures were strong throughout the night and this morning as they were pointing towards a slightly higher open even before the latest unemployment figures were released. The bulls got a bonus package when Initial Claims came in at 391,000 versus expectations for 419,000. The break below 400,000 was a big surprise although the numbers are a little misleading. Elsewhere, 2Q Gross Domestic Product (GDP) figures showed growth of 1.3%, versus expectations for an improvement to 1.2%. The GDP deflator came in at 2.5% versus calls for a 2.4% increase.

One stock we want to cover this afternoon is Netflix (NFLX, $113.94, down $13.20) which is getting spanked today. We profiled a strangle option trade on Monday which we have been updating daily and here were our comments this morning along with a chart:

“Thoughts: We said you could have SOLD the calls on Monday for $5 and if you did you are now up nearly 50%. The puts are still attractive on a break below $125 (green line, purple circles) and were at $1.70 Monday morning. The 200-day moving average is at $95 and the chart is giving us a $100 (orange line, brown circles) price target.

The October 95 puts (NFLX111022P00095000, $3.10, up $1.80) closed at $1.30 yesterday and traded to a low of $1.20 this morning before surging.

The October 150 calls (NFLX111022C00150000, $1.00, down $1.55) which we said to SELL at $5 on Monday are now up 80%!

If this had been an “official” trade we would probably be covering the position as we type and we have already gotten a few “thank you’s” on the heads-up for Netflix this morning from some of our subscribers who trade our Watch List.

Although we may have missed this trade for now, there are other trades we are watching. In fact, we have 4 more NEW TRADES we are releasing right now so we have to roll.

The Dow is up 173 points to 11,184 but is having trouble maintaining 11,200. The S&P is higher by 12 points to 1,163 while the Nasdaq is up only 4 points to 2,495. Subscribers, check the Members Area for the NEW TRADES!

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Netflix Headed For $100 – or Lower

CFTC Disclosure: