
Rocket Equities & Options - NFLX Call Credit Spread 10-20-20
NFLX Call Credit Spread $565 - $575
Sell Oct 23rd $565 Call
Buy Oct 23 $575 Call
Collect a credit of about $2.30. Our max profit is $230 if NFLX closes Friday below $565. Our max loss is $770 if NFLX closes above $575 Friday. We are risking just over $3 to make $1 in this trade. If NFLX jumps higher we could lose our entire capital so set your risk accordingly. NFLX is certainly capable of trading higher on earnings, I just don't see a jump that much higher when so much of the growth is already in this price, and the rush of new subscribers over the last two quarters is expected to hurt new subscribers numbers when they report earnings tonight.
NFLX has earnings after the bell tonight and the option market is pricing in more than a $36 move on that event. We will look to absorb some of that premium about $35-$45 above the current market price. NFLX is currently trading at $531.27.
Buy Oct 23 $575 Call
Collect a credit of about $2.30. Our max profit is $230 if NFLX closes Friday below $565. Our max loss is $770 if NFLX closes above $575 Friday. We are risking just over $3 to make $1 in this trade. If NFLX jumps higher we could lose our entire capital so set your risk accordingly. NFLX is certainly capable of trading higher on earnings, I just don't see a jump that much higher when so much of the growth is already in this price, and the rush of new subscribers over the last two quarters is expected to hurt new subscribers numbers when they report earnings tonight.
NFLX has earnings after the bell tonight and the option market is pricing in more than a $36 move on that event. We will look to absorb some of that premium about $35-$45 above the current market price. NFLX is currently trading at $531.27.

