$NFLX bulls click on fast profits

Bullish option positions opened in Netflix (NFLX) yesterday have doubled in price today as shares reach a new 52-Week high.

Just yesterday morning, Market Rebellion’s Unusual Activity Service found that 12,000 May $450 calls expiring this Friday were bought for $2.50 to $4.43 with shares at $437.35. This was clearly fresh buying, as open interest in the strike was only 5,784 contracts before the activity appeared.

Those calls traded for as much as $8.45 this morning, more than double their average purchase price. The stock rose 3.34% in the same time frame, illustrating the kind of leverage that can be achieved with options.

Long calls lock in the price where a stock can be purchased, gaining with a rally and providing leverage to the underlying shares. The contracts can quickly lose value if the stock stalls or pulls back but also carry less risk than owning the shares themselves.

NFLX made a new 52-Week high of $452.38 earlier in the session before trading in a volatile session with the rest of the market before settling higher on the day by 0.84% at $441.95. The video-streaming giant’s shares have risen sharply in the “stay-at-home” economy.