NFLX Analysis

Netflix Inc. (NFLX)

Update 6/26/2017: NFLX rose steadily after my entry into the position. I exited for a loss as expiration approached.

Shares rose by 3.6% over six days, or an annual rate of 217%. The options position produced an 18.4% loss on debit for a -1,120% annual rate.

NFLX has sufficiently high implied volatility to qualify for analysis and possibly a trade.

I shall use options that trade for the last time 10 days hence, on June 30.

Implied volatility stands at 47%, which is 4.4 times the VIX, a measure of the volatility of the S&P 500 index.

NFLX’s IV stands at the 58th percentileof its annual range and the peak of its most recent broad movement.

The price used for analysis was $153.31.

Premium: $5.01 Expire OTM  
NFLX-iron fly Strike Odds Delta
Long 162.50 90.2% 11
Break-even 157.51
Short 152.50 48.9% 53
Short 152.50 51.0% 47
Break-even 147.01
Long 142.00 90.7% 8

The premium is 49% of the width of the position’s wings.

The risk/reward ratio is 1.1:1.

Decision for My Account

I have entered an order on NFLX as described above. The stock at the time of entry was priced at $153.06.

By Tim Bovee, Portland, Oregon, June 20, 2017


Tim Bovee, Private Trader tracks the analysis and trades of a private trader for his own accounts. Nothing in this blog constitutes a recommendation to buy or sell stocks, options or any other financial instrument. The only purpose of this blog is to provide education and entertainment.

No trader is ever 100 percent successful in his or her trades. Trading in the stock and option markets is risky and uncertain. Each trader must make trading decisions for his or her own account, and take responsibility for the consequences.

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