Investors Are Playing The Apple Game

Netflix Tie with Apple TV spurs options frenzy, Wednesday,  as Shares take off and call options on Netflix are in high demand. Apple Inc. CEO, Steve Jobs, said the new Apple TV product will allow consumers to stream movies from Netflix for the first time.
“It’s the biggest change in the iPod lineup ever.”
Steve Jobs
NFLX shares jumped 8.5% on the news to an intraday high of $136.25 in late afternoon trading. Near-term bullish trading strategies dominated options action on Netflix today as a number of investors picked up calls and sold puts on the stock.

Traders purchased approximately 1,400 now in-the-money calls at the September $135 strike for premium of $4.45 apiece.

Source: Bloomberg

Another 1,500 calls were coveted at the higher September $140 strike at an average premium of $2.55 each. Shares in NFLX must increase another 4.6% in order for traders long the September $140 strike calls to start to accrue profits above the average breakeven price of $142.55 by expiration day.

Optimists also scooped up 1,500 calls at the September $145 strike for premium of $1.57 each, and bought approximately 1,300 calls at the September $150 strike.

Some put players drew a line of resistance in the sand at $130.00 and sold roughly 2,000 puts at the September $130 strike for an average premium of $4.98 apiece.

Put sellers keep the full premium received as long as Netflix shares exceed $130.00 through expiration day.
Otherwise, it seems these individuals are happy to have shares of the underlying stock put to them at an effective price of $125.02 each in the event the puts land in-the-money at expiration.

Source:  The Options Insider.


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