Wedge has formed and price is heading into the apex now. Look for a break (can be up or down) in the next 3-4 weeks.
1) cord-cutting growth
2) content prices
One of the scans I do frequently involves what I term as “pricey” stocks. These companies have a share price that is over $100 a share. This doesn’t mean they are expensive or over-priced. Currently I have 273 tickers that meet that criteria (as well as my Avg Volume criteria):
This is the trade that I initiated for $NFLX into Earnings:
The stock went UP.
I was able to go Long the stock at 520.22 in A/H on 4/15 for a hedge. I took off this hedge at $537.90. The stock wavered very little so I started a new Long stock position at $534.40 as a 2nd hedge. I BtC the April $540 Calls for a $6.25 debit on 4/16 & then I set a Stop at $543.40 on the Long stock piece. The Stop did hit on 4/16.
The stock is trading around $558 in P/M today, Friday 4/17, so the Stop hunters got me this time. Although the Put Fly expires worthless, the stock hedging and being prudent to BtC the $540 Calls were the correct steps in my normal process. The market said my trade was wrong – So be it.
Net on the trade:
I’ve been getting questions today surrounding my $NFLX Earnings trade so I thought I’d do a brief review here. The trade:
I have done a few stock short trades (scalps) in after hours.
So what now?
The ideal scenario for this trade is to drift up to near the $470 level by Friday expiration so that I can get optimum value from the long $450 Calls. The 2 levels I need to watch are $480 & $400 (any movement towards here and I have to be ready to hedge with stock or BtC the relevant short Options).