Netflix Inc. (NFLX)
NFLX publishes earnings on Monday after the closing bell.
I shall use the MAY series of options, which trades for the last time 32 days hence, on May 19.
Implied volatility stands at 43%, which is 2.9 times the VIX, a measure of the volatility of the S&P 500 index.
NFLX’s IV stands in the 48th percentile of its annual range and the 95th percentile of its most recent broad movement.
The price used for analysis was $147.00.
The premium is 52% of the width of the position’s wings.
The risk/reward ratio is 1.5:1.
Decision for My Account
I am passing on NFLX. The risk/reward ratio is higher than I like for this sort of trade. The stock at the time of decision was priced at $146.90.
By Tim Bovee, Portland, Oregon, April 17, 2017