Update on the Netflix trade

Netflix is up tonight.  Trading earnings reports like this is very risky and more akin to gambling than investing.

We’re up about 50% or so in three days on a tiny bit of capital that I threw at some out-of-the-money Netflix calls dated out into early next year, as I noted last week.  I bought these options as a play on Netflix earnings and I’m going to go ahead and hold them on through the report tonight and let the trade play out as is. Even though, yeah, I’m nervous about the set up.  If the company guides the Street that subscriber growth estimates for next quarter and/or next year have to come down, this stock could take another hit tomorrow and would likely wipe out not just the 50% gains we’ve currently got in the calls but would even wipe out probably 50% of our original capital in the trade too.