$NFLX bulls stream fast profits

Bullish option positions opened in Netflix (NFLX) a few hours ago have about tripled in price today as shares reach a new 52-Week high.

Just this morning, Market Rebellion’s Unusual Activity Service found that 5,000 April $390 calls expiring this Friday were bought for $2.71 to $5.35 with shares at $376.44. This was clearly fresh buying, as open interest in the strike was only 3,653 contracts before the activity appeared.

Those calls have traded for as much as $13.95 this afternoon, more than 3 times their average purchase price. The stock rose 5.89% 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 was last up 6.98% to $396.60, just off its new 52-Week high of $398.83 made earlier in the session. The video-streaming giant is set to report earnings on Apr. 21 after the close of the market.