$NFLX bulls stream more gains

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

On Nov. 13, Market Rebellion’s Unusual Activity Service found that 11,000 February $275 calls expiring this Friday were bought for $27.15 with shares at $283.04. This was clearly fresh buying, as open interest in the strike was only 16 contracts before the activity appeared.

Those calls have traded for as much as $111.63 today, more than 4 times their purchase price. The stock rose 36.56% 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 2.25% to $388.95, a new 52-Week high for the shares.