Savings Experiment: Snow Removal
The Money Man Behind Rick Santorum: Who Is Foster S. Friess?
Netflix (NASDAQ: NFLX - option chain) stock is trading lower today after the company reported some recent insider selling. According to SEC filings, NFLX Director Gregory Strangre sold over 19,000 shares of NFLX on Wednesday for $54.48 per share. He and other insiders have combined to sell more than $2.2M of NFLX stock in the past week, which could be interpreted as a bearish sign for the company. If you think this stock won't be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on NFLX.This morning, NFLX opened at $54.96. So far today the stock has hit a high of $55.84 and a low of $54.00. As of 11:50, NFLX is trading at $55.26, down $1.13 (-2.0%). The chart for NFLX looks bullish and S&P does not currently have a STARS rating for NFLX.
For a bearish hedged play on this stock, I would consider a December bear-call credit spread above the $65 range. A bear-call credit spread is an options position that combines the purchase and sale of call options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 4.2% return in six weeks as long as NFLX is below $65 at December expiration. Netflix would have to rise by more than 17% before we would start to lose money. Learn more about this type of trade here.
NFLX hasn't been above $57.50 ever and has shown resistance around $57 recently.
Brent Archer is an options analyst and writer at Investors Observer.
DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls positions in NFLX.
Goldman Earnings Sink After Buffett Dividend
Johnson & Johnson's Income Falls 23%
Burberry Shares Leap on Sales Update
