Netflix stock options priced for a big post-earnings move, but not quite as big as usual

Choices on Netflix Inc.’s inventory
NFLX,
-1.69%
are priced for a near-double digit transfer on Friday, following the streaming video firm experiences fourth-quarter outcomes that are due out after Thursday’s closing bell. An choices technique referred to as a straddle, which is a pure volatility play that entails shopping for bullish (calls) and bearish (places) choices at that very same worth, is priced for a one-day post-earnings transfer of $31.20, or 9.7%, in both course, in accordance with knowledge supplied by Matt Amberson, principal at Choice Analysis & Expertise Companies (ORATS). That’s lower than the common post-earnings strikes over the previous 12 quarters of $34.52%, or 10.7%, Amberson stated. Based mostly on present costs — the inventory was down 1.2% at $322.44 in afternoon buying and selling Thursday — a straddle purchaser would begin earn cash if the inventory closes Friday beneath $291.24 or above $353.64. Over the previous 12 quarters, the inventory moved greater than 9.7% simply 3 times, in accordance with FactSet knowledge. Additionally, the inventory rose after the previous two quarterly outcomes, however fell after 9 of the previous 12 experiences. The inventory has run up 18.4% over the previous three months, whereas the S&P 500
SPX,
-0.39%
has gained 6.0%.