$NFLX bulls stream quick gains

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

On Wednesday, Jul. 1, Market Rebellion’s Unusual Activity Service found that 5,600 Weekly $500 calls expiring this Friday were bought for $1.10 to $4.30 with shares at $461.68. This was clearly fresh buying, as open interest in the strike was only 2,383 contracts before the activity appeared.

Those calls traded for as much as $10.05 today, at least double their purchase prices. The stock rose 8.07% 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 $499.50 earlier in the session but has since pulled back, last up on the day by 2.8% at $490.26. Canaccord noted this morning that the video-streaming giant’s leadership is poised to persist, reiterating a $550 price target.