Netflix Inc. is one of the biggest companies and the market leader in the streaming industry. As big as the company is, the stocks are even better. The shares of the streaming service are known as the biggest stocks in the market, which are also expensive.
Analysts also know that the Netflix stocks are expensive, but if anyone plans on to invest in the company and its shares, the final value could be double the investment, which has been made within three months. Furthermore, it is a great option to double the money in short time.
According to an article published in Barron, “With the stock at $662, buy Netflix’s September $680 call at $44.55 and sell the September $700 call bid at $35.50. The spread costs $9. For the trade to break even, the stock has to get back to $689 by September.” Moreover, if the company's shares are at the expiration of September at $700, then investors’ could get 120% return and a $10.80 profit.
The article further explains the trade math as “$20 (that is the spread between the call strike prices) minus the $9 trade cost shows the trade’s potential profit is $10.80. In other words, anyone who does the trade risks $9 to make a $10.80 profit. To figure out the percentage return, divide $10.80 by the $9 trade cost, which equals 120%.” The call spread that the streaming giant is providing is a new 52-week high by fall. This has surpassed the high value posted on June 10, which was $692.79.
Just in case if the stock price is moved up or down according to the situation of the market, investors will only have to replace the strike prices and come up with their own trade model in order to know what is the reality and how much return they will get. It will not be wrong to say that Netflix is undoubtedly one of the market’s hottest momentum stocks in recent years.
So far this year, the company has managed to keep its stocks up by a massive 94% at a point where Standard & Poor’s 500 Index was having issues in advancing in the market.
People, who will invest in the stocks of online streaming giant, should know that the future is secure. The company is doing a tremendous business following expansions, as well as owning and producing original and unique content. Furthermore, it is also on the verge of releasing its own program on its platform.