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If you think back to last November – you’ll remember that everyone was throwing in their towels on Netflix (NFLX).
Amidst a sudden whirlwind of bad news – like the serious Kevin Spacey allegations, and Disney pulling all of its content in order to start its own streaming business.
It was a bad news business for this streaming giant.
But fast forward six months, and the tables seem to be turning…
Recently, NFLX announced it is spending $8 billion on developing and acquiring original content. And on top of this, they plan to raise $1.5 million in debt.
That’s a step in the right direction – something any investor likes to see.
So, I’ve got three ways you can play this upswing – and the third one will blow your mind.
Three Strategies to Cash in on NFLX
Recently – Netflix, Inc. (NFLX) released their earnings report.
And while many were concerned the streaming giant wouldn’t live up to the numbers predicted — it turned out to be wasted worry.
Netflix actually came out on top in every category – beating expectations for earnings per share (eps), revenue, and you guessed it – subscriber growth.
The company came in at 7.4 million subscribers for the first quarter – beating the “expected” 6.5 million by nearly one million.
On top of this, the Netflix noted that it was their fastest year over year growth in company history.
And despite the volatile markets and political rhetoric that has put the market in an up and down cycle – Netflix (NFLX) is currently up over 60% for 2018 – an impressive number compared to the market as a whole.
Now when you see a stock performing like NFLX is – you may want to jump right in. But before you do – here is three different strategies that could give you the biggest profit while protecting your from any unexpected bumps along the way.
“Flip” the Stock – Don’t Buy It
As I noted earlier, Netflix is currently up over 60% in 2018 and it’s showing no signs of slowing down. I’m also seeing no signs of sell off in the near future.
We’ve discussed several different strategies to combat earnings reports – and we’ve discussed how at times the best thing to do is close your trade before the announcement.
On the other hand, we’ve talked about straddles – and how it times holding on through earnings can bring you the largest rewards.
But seeing NFLX had such a positive earnings report and has the capability to go much higher, I want to talk to you about what the best move might be for you and your bottom dollar.
If you look at the chart above, you will see what
NFLX was trading at close of market Thursday, April 19, 2018.
The green triangle with the letter “E” indicated the trading say of earnings.
The stock traded down that day but since releasing its earnings reports -but since has jumped up and has continued to climb.
I’ve also circled the price level to which the stock could retrace before I see it regaining its footing and climbing again.
With this being said, let’s take a look at our strategies.
1. Go for long call option.
Long call options offer us the safety net of less risk – and more time for the stock to grow – that’s why I typically recommend these in my services.
As of now, there are no options with July expirations – and the first month available being September.
I still think a long call is a great option – but you may want to weigh your thoughts on what earnings could do.
2. Buy LEAPS
If the idea of earnings spooks you like it does many, another option for this trade would be to buy LEAPs. LEAPs are long term options – and as of now, I am eyeing LEAPs in January of 2019.
Now, the price of the LEAP above (January 18, 2018 $330 call) is $50.45. That means to open one contract would cost you $5,045…
Now, this may seem like pretty penny but compared to buying 100 shares of the stock outright for $33,720 – it doesn’t seem so bad.
That’s why I always recommend that you trade options as they can offer less risk and more gain.
3. Thanks to my groundbreaking discovery, I’m able to pinpoint trade recommendations on the hottest, fastest-growing names in the world.
Companies pioneering the technologies that are shaping tomorrow’s future, today.
I’m talking about being able to trade expensive, “FANG” stocks… more than just Netflix… Facebook, Google, and Amazon too.
Soaring companies that for some folks, for 1000 shares of stock – are paying upwards of $50,000.
But the way I do things, with just one extra click of your mouse, this strategy can help you grab huge cash by leveraging the hottest stocks on the planet… for pennies on the dollar.
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With this said – Netflix continues to receive several upgrades and target prices and all signs are pointing towards the company continuing to climb higher.
But before you add this streaming giant to portfolio – as always, talk to your broker and find out if this position is the right move for you.
And if you decide this is the best move for you – continue to stick to your strategy and trust your plan.
That’s all for now…
Tom Gentile
America’s #1 Pattern Trader
P.S. You can access my weekly “Money Call” every Monday, even on your cell phone… It can give you the chance to double your money every 96 hours… and I’m sending the next one out on Monday. Click here to learn how to get in position for the fastest way to make money every single week.
