How to trade Netflix using options ahead of earnings

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Markets,Personal Finance,Netflix Inc

Mike Khouw discusses why traders may want to use an upside call option as a substitute for a long stock position into results right now.

Netflix earnings are out after the bell Thursday. Here's why traders may want to use an upside call option as a substitute for a long stock position into results right now. Netflix shares are up more than 35% in the past 12 months ahead of its earnings report, currently placing it about 4% from the average price target of analysts. The key question is whether the company has peaked or has room for further growth.

mountain Netflix, 5 years Additionally, a five-year chart raises concerns about a potential double top, adding another reason to consider options-based stock substitution strategies. All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, NBC UNIVERSAL, their parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY .

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