SaxoTV

#SaxoStrats - Buying Netflix straddle

398 views
April 15, 2015 earn, earning, earning reports, earnings, earnings 2015, earnings earnings season, earnings expectations, earnings multiples, earnings per share, earnings ratio, earnings reports, earnings results, earnings season, earningseason, earningsreports, earningsseason, earningsweek, eq, eq3, eqeqeq, equities, equities 2014, equities 2015, equities and bonds', equities europe, equities in china, equities over valued, equities prices, equities saxo, equities saxo bank, equities strength, equities trade, equities trading, equities v bonds, equitiy, equity, equity analyst, equity bubble, equity clients, equity correction, equity decline, equity falls, equity index, equity index trading, equity indices, equity market, equity market 2014, equity market 2015, equity markets, equity platform, equity portfolio, equity portfolios, equity research, equity rise, equity risk premium, equity risk premiums, equity sell off, equity strategy, equity trades, equity trading, equity us, equity valuation, equtiies, equtiy, net, net short, netflix, netflix earnings, netflix profit, netflux shares, network, optimism, option, option expiry, options, options expiring, options market, options markets, peter garnry, resistance levels, saxo tv, saxostrat, saxostrats, straddle, straddle option, strategy, tradingfloor.com, webinar, weq
Netflix on average sees around 10% volatility following its quarterly results.
Saxo Bank's Head of Equity Strategy Peter Garnry explains how he's buying the May 15 (expiry May 15) USD 475.00 Straddle to play the earnings release.

Entry: Buy the May15 USD 475.00 Straddle at 56.50
Buy the May15 475 Call at USD 27.50
Buy the May15 475 Put at USD 29.00
For one Straddle you pay a premium of USD 56.50 X 100 shares =  USD 5,650.

The trade is aimed at a market gap opening up or down significantly after the earnings release, when volatility should spike up and the straddle will become more expensive.