Pre-Market Alert: NFLX Set to Explode
Plus, GMCR Rallying Too!
PLAY: Within the first hour of trading, sell your NFLX February 52.50 Calls (QNQ BQ) for the best prices you can.
PLAY: Within the first hour of trading, sell your GMCR February 85 Calls (QGM BQ) for the best prices you can.
Dear Bottarelli Research Member,
Looking at the pre-market activity on NFLX and GMCR, it’s fair to say that it’s going to be a good morning. To quote my favorite YouTube video, “Boom goes the dynamite!”
Shares of Netflix (NFLX – NASDAQ) are about to explode to the upside, after reporting a 36% increase in Q4 profits combined with a sharp increase in subscribers and reduced subscriber-acquisition costs. They earned $31 million ($0.56 per share) versus $22.7 million ($0.38 per share) one year ago. This fantastic news is pushing shares of NFLX nearly $10.00 higher in pre-market trading. Without question, this will push our NFLX February 52.50 Calls (QNQ BQ) aggressively higher. As you know, we entered these speculative calls for $2.20, and intrinsic value alone should push them up to $7.50. Therefore, we should be talking gains of at least 240% on this baby. Within the first hour of trading, use the opening-session pop on NFLX to sell your calls for the best prices to maximize your returns.
PLAY: Within the first hour of trading, sell your NFLX February 52.50 Calls (QNQ BQ) for the best prices you can. As a target, aim for at least $7.50, which would result in a 240% return.
Not to be outdone, shares of Green Mountain (GMCR – NASDAQ) are also pushing $3.00 higher this morning after reporting Q1 earnings per share of $0.27, which beat the estimate of $0.16 by a wide margin. Their Q1 revenue also increased 77% to $349.4 million, which allowed them to once again increase their full-year outlook.
As you know, we’re holding the GMCR February 85 Calls (QGM BQ) for an average price of $3.80. At the close of trading yesterday, they were priced between $3.20 and $3.30, so today’s $3.00 pop should easily take them above our average entry price. Similar to NFLX, I’d like to use any earnings-based momentum within the first hour of trading to sell this position. While it’s difficult to predict how the market makers will price these calls, do your best to maximize your profits by selling into strength. That way, we don’t run the risk of the stock reversing on us. In short, take the money and run!
PLAY: Within the first hour of trading, sell your GMCR February 85 Calls (QGM BQ) for the best prices you can.
After taking these two profits, take a deep breath and enjoy your returns. Then, we’ll assess the remainder of our trading ledger.
And as always…
Lock and load!
Sincerely,
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