Monster Options Volume in New Media Darling


Love it? Hate it? Trade it! That’s the story today in Netflix (NFLX).

The new-media darling cratered this morning on news of weak subscriber growth, before clawing back most of its losses. Analysts were all over the map in response, with some cutting estimates and others boosting targets. Regardless of all the noise, trading volumes were through the roof.

Consider the options flow: Some 740,000 contracts changed hands by about 12:50 p.m. ET. That was the biggest total in three years.

NFLX’s spike made it the busiest equity on TradeStation’s Hot Lists for Most Active Call & Put volume, ahead of names that are typically more active like Apple (AAPL), Bank of America (BAC), Micron Technology (MU) and Facebook (FB).

NFLX had the most transactions of any symbol in the entire market, according to the Most Active – Trades bucket on Hot Lists.

More than 42 million NFLX shares changed hands so far in the session. If that pace continues, it would be most frenzied session in two years — if not longer.

As an aside, recent initial public offering (IPO) Iqiyi (IQ) is known as “the Netflix of China.” It initially followed its American counterpart lower but has now turned green again. Click here for more on our IPO coverage.

Stay tuned for another post tomorrow recapping all the back-and-forth from Wall Street and pundits reacting the NFLX numbers. Seldom have so many said so much and agreed so little!

Netflix (NFLX) chart with option & stock volume.
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David Russell is VP of Market Intelligence at TradeStation Group. Drawing on two decades of experience as a financial journalist and analyst, his background includes equities, emerging markets, fixed-income and derivatives. He previously worked at Bloomberg News, CNBC and E*TRADE Financial. Russell systematically reviews countless global financial headlines and indicators in search of broad tradable trends that present opportunities repeatedly over time. Customers can expect him to keep them apprised of sector leadership, relative strength and the big stories – especially those overlooked by other commentators. He’s also a big fan of generating leverage with options to limit capital at risk.