$NFLX option bulls double money overnight

Bullish option positions opened in Netflix (NFLX) yesterday doubled today as shares gained.

Yesterday, on Jul. 14, Market Rebellion’s Unusual Activity Service found that 9,600 Weekly $550 calls, expiring tomorrow, were bought for $1.86 to $3.80 as part of a bullish spread above the previous open interest of 6,957 with shares at $542.69.

Those calls traded for as much as $9.80 today, at least 2.5 times their purchase prices. The stock rose 2.64% 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 down on the session by 1.2% at $541.37 after trading as high as $557.54 earlier. Bloomberg reported yesterday that Netflix is planning to add video games to its streaming platform, while UBS this morning raised its price target on the shares to $620 from $600.