Making Money Buying a Netflix NFLX CAll Option
I have not posted for a few days as I have been very busy working on my business ventures and with work in general.
But I love coming to the MakingaMillionDollars blog to discuss with you stock strategies and stocks in general. I find writing down my actual trades on this blog helps me document what I am doing right and wrong. Hopefully all of you readers are learning by my mistakes or successes.
I copy my timestamps and trades write here on the post so you can see exactly what I did in case you may want to try the same type of trades some day. Always make your own decisions and of course do you own homework.
Ok guys and gals, here was the Netflix (NFLX) Trade I did the other day.
Filled Buy to Open 1 NFLX Mar 17 2012 90.0 Call Market 9.50 – – 12:37:54 01/06/12
Filled Sell to Close 1 NFLX Mar 17 2012 90.0 Call Limit 13.75 – – 12:16:09 01/09/12
As you can see by the time stamps above from my trading account I bought a $90 out of the money March call option. As you can see I put a market order in and it cost $9.50 per share. Remember if you buy 1 contract which I did this will cost you $950 to hold 100 shares of Netflix Stock until March 17th.
If I would have bought the stock outright it was around $87 per share so it would have cost me $8700. So anyway I had a good feeling about the high volumes and momentum on Friday 1/6 so I decided to purchase the Call option for a quick trade.
Wow, I did not expect on Monday for NFLX to pop all the way up to $98 by the end of the day. Unfortunately I was so excited when I saw the $13.75 bid price for the option and that in total I was up by $4.25 x my 100 shares for my 1 contract that I put in a sell to close order and made a quick $425. Not bad for a days work?
Now if I would have held it to the end of the day it would have been worth much more and I probably lost a few hundred I could have captured.
But my saying is should of, would of, could of and I don’t like to dwell on the fact the stock shot up way higher that day than what I sold it for. I mean I am not greedy and was very happy with $425 quick profit and I was out.
One of the reasons I think this option popped so much was on the news that Netflix opened up shop in the UK and Ireland. But, the negatives were to me that they have huge costs for media this year for the U.S and opening up in these new countries will be very expensive. They are not talking about even making a profit this year.
So I felt this was a good trade and today I see Netflix has dropped back down below $90. I would like to wait for it to drop more and might just buy another option on it.
I have a couple other stocks I have been eyeing to do the same. Stock options can be tough to understand at first, but it can mean really quick money on a trade if you play it right for a low initial investment.
I will be posting more on my options trades so if you want to learn more, come back and read my next few posts.
Talk to you all later,
Steve
