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Netflix, Inc. Message Board

  • buylowandsellhigher buylowandsellhigher Jul 9, 2011 5:36 PM Flag

    puts vs calls

    the 295 put and call are about the same price-you would think the call premium would be much higher, since the shares have been on such a tear lately!

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    • Thats usually bullish when call premiums are low. Means that puts are inflated relative to calls do to sentiment.
      If you are a contrarian you go the opposite way of the crowd.
      So many love to hate this company, so therefore my guess the rally in this stock continues.
      Also when markets are strong, as they are at the moment, the leaders rally even more.
      Most, by that I mean the regulars who post here, are for the most part clueless.

      • 1 Reply to MLDTextbook
      • Another intelligent post. I will buy in the money puts or calls any day over buying or borrowing shares. If you are short term oriented it's the best way to trade.
        You need to know how to use them, excellent for hedging as well.
        Selling premiums that get inflated do to volatility is another way to take advantage of big price swings.
        But I emphasize you must study how volatility works and how they reflect sentiment. There is mathematics and nuance involved that is in some ways intuitive. Also software programs are available that take out emotion.
        Emotion and fear are the greatest obstacles.

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