Netflix (NFLX), whose stock is up more than 55% in the last 12 months closed up almost 3.5% yesterday at $192.71. Analysts continued to recommend the stock going into 2018. Noteworthy is that NFLX has surpassed analysts’ estimates in the December quarter every year since 2012.
If yesterday’s option volume is any indication, NFLX shares could see new all-time highs sooner rather than later. Over 180,000 option contracts traded with over 60% of them being call options. Not only was there huge volume in the 195 strike calls that expire at the end of trading today, but there was huge call buying in the January 19th 200 strikes and above.<
Typically when a stock rallies, the option implied volatility DECREASES but we saw the IV in NFLX race higher by almost 8% yesterday, which suggests continued momentum and activity in the stock. The option market is calculating an expected move in NFLX of almost $10 between now and the January 19th expiration, which is just 3 days ahead of it’s next earnings release.