UPDATE: Netflix stock options prepped for big post-earnings move relative to FAANG peers, but not itself

01/17/19 01:49 PM EST

Traders of Netflix Inc. (NFLX) stock options are ready for a big reaction to the streaming video giant' earnings report, when compared with other "FAANG" stocks, but that's actually pretty normal for Netflix shares. Netflix is scheduled to report fourth-quarter results (http://www.marketwatch.com/story/netflix-earnings-can-the-streaming-giant-clear-a-high-bar-of-investor-expectations-for-a-change-2019-01-11) after Thursday's closing bell. An options strategy known as a "straddle," a pure volatility play that involves simultaneously buying at-the-money bullish (calls) and bearish (puts) options, is currently priced for an 8.3% move in the stock, in either direction, on Friday. That matches the average one-day post-earnings move in the stock over the past 10 quarters of 8.3%, according to an analysis of FactSet data. Meanwhile, that move is well above the average one-day post-earnings stock moves of the other FAANGs over the same time: Facebook Inc.'s (FB) is 4.9%, Amazon.com Inc.'s (AMZN) is 4.1%, Apple Inc.'s (AAPL) is 4.7% and Google parent Alphabet Inc.'s (GOOGL) is 3.2%. Netflix stock was down 0.5% in morning trade. It has slipped 3.9% over the past three months, while the Nasdaq Composite has dropped 7.9% and the S&P 500 has shed 6.9%.

-Tomi Kilgore; 415-439-6400; AskNewswires@dowjones.com

 

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01-17-19 1349ET

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