NFLX Earnings Preview + Open Interest

NFLX reports earnings on Wednesday, January 22. Going back two years this is the lowest implied volatility has been right before earnings pricing in + or – $33.

Breaking it down a little further to just next week, the IV is at 106.5% and the measured move is + or – $35.15.

NFLX closed Friday at $330.04. Here is their chart.

Screen Shot 2014-01-19 at 5.35.34 PM

Currently, this is what next weeks open interest looks like with the highest strikes at the 300 puts and the 350 calls.


Good Luck

3 Enlightened Replies

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  1. Derrick says:

    How can I use the OI information to make a decision in direction?

    • admin says:

      You can’t. The information helps some who are making a decision as to whether to sell or buy volatility. It can also possibly help you to know the open interest after earnings. It can’t give you a directional bias.

  2. Gary says:

    If you look at OI compared to the daily volume, you may determine the level of interest in the option strike. If daily volume is less than OI, then it is very possible that traders are holding the position in that strike for more than a day trade. Use other factors, such as news and projected earnings to determine if you think the option was bought or sold. Also look at the OI of puts. If put activity is low, then there is a greater chance the call was options purchased out size the ones sold. I only look at OI closely when trading weeklies.