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.

FA notes:

1) cord-cutting growth
2) content prices

– DM 12:45 PM CST

Pricey Stocks

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):


Courtesy of Finviz

Interesting to see after a day of trading, many show very little movement from the yesterday (5/18) close.

– DM 4:20 PM CST


Trade review in Netflix

This is the trade that I initiated for $NFLX into Earnings:

  • Long the April 470/450/435 Put Fly with Short $540 Calls
  • I set a mental Buy Stop at $520 as the level where I would hedge with Long stock if need be
  • This trade was done for a -$.24 debit
  • This trade took margin

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:

Options:  -$6.49
Stock:     $26.68

BtC = Buy to close


– DM 8:15 AM CST


An Earnings trade in Netflix

I’ve been getting questions today surrounding my $NFLX Earnings trade so I thought I’d do a brief review here. The trade:

  • Long July 25 weekly 450/470/480 1×2 Split Call Ratio with Short 400 Puts. This means I am long the $450 Calls & short the $470 & $480 Calls as well as short the $400 Puts
  • Trade was done for a $.35 debit
  • This trade takes margin

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).