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Double or Nothing: Netflix Scores Big

It’s safe to say that Netflix has had a fantastic year. The streaming company’s 107 percent shares increment is almost unprecedented in the modern markets. While this turn of events has been more than jolly good news for the company, one trader believes that Netflix could keep reaching for the stars.

A founder of TradingAnalysis, Todd Gordon, has documented that Netflix shares have been on the up even before they file their books on July 16. He shared that he would like to get long the stock using choices prior to the due date

Gordon mentioned that those looking to place their bets on Netflix going big should follow his cue. He said that he believes it’s better to sell puts instead of buying calls for a varied number of reasons. The number one reason is that Netflix’s choices in volatility have suggested that the company was heading towards overbought territory prior to the July 16th date. What this means is that the prices of choices would be expensive especially given the fact that most of the company’s post-earnings moves are typically humongous.

The second reason he has faith in the company is because now seems like the perfect time to swoop in and make full utility of numerous projections on the uptrend. In addition, there’s also a diminutive chance of missing out on massive earnings.

Analysts believe that Netflix’s continued growth and support from investors should peak at about the $380 region. Gordon shared that he’ll be venturing in the sale of a put spread below the $375 support line. Other than that, he’ll also be buying a $370 put just in time for the July 20 expiration. Once he does this, he expects to reap massive earnings with the potential profit of about $1.80-$1.83 credit.

Strength to Strength

Earlier in the year, May to be specific, Netflix surpassed Disney as the most valuable media company in the United State

Th power shift happened at about the same time that Disney was busy haggling with some owners at 21st Century Fox over their TV and film assets. At the same time, the ex-powerhouse, Disney, noted that a paradigm shift among consumers was inevitable due to changing tastes in consumption habits.

Before recording the momentous 107 percent increment in stock price, Netflix was doing pretty well in their first quarter. Having grown by 70 percent between January and May, the company took away the mantles from Disney by taking a commanding market capitalization of about $162 billion.

A couple of smart marketing moves like poaching the former first family, Barack and Michelle Obama, in a multimillion-dollar deal that would see the pair produce their own shows on Higher Ground Productions. The former president mentioned that they were hopeful of cultivating and curating the talent of inspiring and creative individuals. All in a bid to boost empathy and understanding among individuals eager to share their narratives with the rest of the world.

Information shared by the Financial Times indicated that the Obamas’ lucrative deal included both scripted and unscripted feature films, series and documentaries. Many believe that Disney will be looking to reestablish themselves back as world leaders in the entertainment industry once they make true their ambitions of venturing into the subscription-streaming business.

Great Minds

The aforementioned companies have made it abundantly clear that they are willing to pour billions of dollars to create content on their own platforms. The ricochet effect of this is that conventional entertainment studios have found it hard to cope with the changing tides. This is because there has been a relative increase in costs, a boon for talents, and a bane for their studios. All this has been brought about by Silicon Valley companies lining actors’ pockets with more dough.

Shindler mentioned that they expect Netflix’s global subscriber base to rise to about 360 million by 20140. While these figures are impressive, the company has been quick to point out that this represents a rough conservative estimate given the projections they now have.

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