NFLX - Earnings and volatility and COVID-19! Oh, my!

[Girija]

This is something I don't get, is this a short squeeze? Because they missed EPS, how are ppl/Algos buying here?

Shamelessly i will say short answer is boneheaded bet on something that attracts a lot of ppl who don't look at fundamentals. Nflx,amzn,tsla usually spikes when street expected more subscribers.
As long as it is positive it keeps my man happy. He is the one that is finding anyway....
But the nice way of putting it is price action.
I do algo only on index etfs this won't be picked in algo.

 

[Matt_ORATS]

The options straddle expects NFLX to move $28.57. From the after hours -<1% it looks like that straddle is going to hurt the longs.
IBKR after its WTI customers cost it $88 mil is down $3.70 where the straddle was expecting a $2.70 move.

 

[S2007S]

I wouldn't touch this stock. Subs were outstanding yes but only because of the quarantine, once everyone is back to their regular scheduled programs and the quarantine is lifted subscriptions are going to fall off dramatically. And netflix is nothing but subscribers, just remember AOL back in the day when they were adding subs, the stock was unbelievable, then one day the Subs stopped and that was it for AOL. Netflix will probably have decent quarter next time but going into end of 2020 i wouldn't own it.




Here is what Netflix reported:

• Earnings per share (EPS): $1.57
• Revenue: $5.77 billion
• Global paid net subscriber additions: 15.77 million

Wall Street was anticipating earnings per share of $1.65 on revenue of $5.76 billion, based on Refinitiv consensus estimates. Domestic (U.S. and Canada) paid subscriber additions were expected to come in at 775,000 and international paid subscriber additions were expected to be 7.2 million, according to FactSet. However, it’s difficult to compare reported earnings to analyst estimates for Netflix’s first quarter, as the impact of the coronavirus pandemic on earnings is complicated to assess.

 

[Girija]

I wouldn't touch this stock. Subs were outstanding yes but only because of the quarantine, once everyone is back to their regular scheduled programs and the quarantine is lifted subscriptions are going to fall off dramatically. And netflix is nothing but subscribers, just remember AOL back in the day when they were adding subs, the stock was unbelievable, then one day the Subs stopped and that was it for AOL. Netflix will probably have decent quarter next time but going into end of 2020 i wouldn't own it.


Here is what Netflix reported:

• Earnings per share (EPS): $1.57
• Revenue: $5.77 billion
• Global paid net subscriber additions: 15.77 million

Wall Street was anticipating earnings per share of $1.65 on revenue of $5.76 billion, based on Refinitiv consensus estimates. Domestic (U.S. and Canada) paid subscriber additions were expected to come in at 775,000 and international paid subscriber additions were expected to be 7.2 million, according to FactSet. However, it’s difficult to compare reported earnings to analyst estimates for Netflix’s first quarter, as the impact of the coronavirus pandemic on earnings is complicated to assess.

You say you wouldn't touch NFLX. Agreed as an investment. Doesnt momentum and volatility held scalping easier?

 

[Atikon]

Shamelessly i will say short answer is boneheaded bet on something that attracts a lot of ppl who don't look at fundamentals. Nflx,amzn,tsla usually spikes when street expected more subscribers.
As long as it is positive it keeps my man happy. He is the one that is finding anyway....
But the nice way of putting it is price action.
I do algo only on index etfs this won't be picked in algo.

You stay away from Earnings in your Algo Trading in general? Or just Sub Stocks that have momentum? Do you have Industry Insight in Algo Trading? Because these extreme Breakouts are not uncommon, even for non Sub Stocks. Always wondered if Algos don't just make the small potatoes give up their positions. The price action on Netflix today was equal to ca.15% of the Stockprice

 

[Girija]

You stay away from Earnings in your Algo Trading in general? Or just Sub Stocks that have momentum? Do you have Industry Insight in Algo Trading? Because these extreme Breakouts are not uncommon, even for non Sub Stocks. Always wondered if Algos don't just make the small potatoes give up their positions. The price action on Netflix today was equal to ca.15% of the Stockprice

Program monitors specific securities and follows candle patterns. At the moment trades are limited to udow,sdow,tqqq,spxl,spy. Action on VIX and or uvxy will throttle the scalp but don't trade on them. I watch for tagged good and bad news but realistically watching news requires significant compute power. Too much to do from a home setup. I was scalping on nvda until it reached 260 and removed it. I worked as a developer for a investment bank and quit. Don't claim I know anything about industry insight. Some of the readers are far more knowledgeable than me.
Too much swing will trigger stop limit. Not a good idea around earnings. TSLA is same way. Sustained day long scalping must consider the drawdown. Right now index etfs look attractive to play.

 

[TheBigShort]

The options straddle expects NFLX to move $28.57. From the after hours -<1% it looks like that straddle is going to hurt the longs.
IBKR after its WTI customers cost it $88 mil is down $3.70 where the straddle was expecting a $2.70 move.

Hey Matt, as you know I am a big fan of your product. However, I would really like some clarity on some variables. I see you updated the documentation which is great. Could you also give some color of the difference between ImpliedEarningsMove and ImpErnMv.

As well, I really like the idea of the fcstearneffct. But I am not quite understanding what these numbers represent. Like which number would be considered expensive and which would be cheap. If you could give some clarity that would be great.