Netflix Inc. (NFLX) is traditionally a volatile stock following its quarterly earnings releases, and Goldman Sachs says that investors can take advantage of that volatility by buying a “straddle” option .
A straddle option is where an investor buys a bullish call option as well as a bearish put option on a stock at the same strike price, in essence betting that the stock will move a certain amount, regardless of which direction in which it moves.
Goldman believes that the company will swing about 7% in either direction following its July 19 earnings release. Netflix has a median moving average of 11% post-earnings.
Netflix shares were down 2.43% to $152.20 premarket Thursday.
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Beware Tesla fanboys: Tesla (TSLA) burning money, but shareholders are the likely ones to blister and feel the pain. The standard 90-day corporate equity lockup period for Tesla, following its $402.5 million stock sale of March 16, ends Thursday TheStreet reports. As a result, Tesla will be free to conduct another stock offering as soon as Thursday, which is a real possibility given the electric car company’s debt situation, partly due to its Solar City investment, and need for additional cash. Any new issuance the company may seek would likely need to take place before July, which is when Tesla issues its quarterly report on car sales. Alternatively, an offering could come in late August after Tesla issues its quarterly financial report.
Shares could start to come under pressure.