Open Mike - April 16th - NFLX Earnings And Viewer questions.

Be sure you know the process, rules, time window and all associated operational issues around how to exercise (or instruct to not exercise) your options with your specific broker!

Amazon Link to The Options Edge:

#optionstrading #investing #stockmarket #stockstotrade

00:00:00 Preroll
00:02:58 Intro
00:29:15 Viewer Question: NFLX high option volume for Jun 950 P and Apr17 1000 C today
00:35:36 Viewer Question: What is your best practices for when to exercise the Long call? P/L? DTE left? Thanks
00:53:46 Viewer Question: Can't expire Friday
00:55:51 Viewer Question: What if debit put spread is ITM at close?
00:56:49 Viewer Question: For $NFLX, I’m thinking buy stock , sell 15 delta straddle; I’m bullish. After market hours, after earnings, price could
01:03:41 Viewer Question: Retail likely to be long options, not short…
01:06:41 Viewer Question: What if scenario for NFLX tomorrow: Short ITM put before noon and stock closed below your strike. Stock goes above strike price after market and becomes OTM . Will the buyer/broker excercise?
01:14:01 Viewer Question: Back in the 90’s expiration was trade matched on Saturday, since we traded paper tickets😅
01:15:47 Viewer Question: Will advertiser pullback by chinese companies affect NFLX?
01:18:58 Viewer Question: what abt strangle swap, buying 4/25 and selling 4/16?
01:22:16 Viewer Question: Are all companies required to report their results before 17:25?

[finwest]

What a fascinating presentation! This kind of detail isn't found anywhere else, Mike, so thank you! While I'll be trading NFLX earnings, I use the Sosnoff method of going out 45 days, which gives me time to adjust if I'm wrong. But knowledge of how this NFLX situation can play out, given the unique combination of events, is really educational. I also appreciated how you referenced IBKR for submitting yes/no exercise instructions. I entered a request to exercise a couple of times in the past, and it was very easy. You're exactly right: in aviation, it's critical to know your position at all times. Another saying: you never put your aircraft in a position where your brain hasn't been five minutes beforehand!

[stevegarcia]

Hi Mike, I'm hoping you can address this on a future stream. I've been watching the NFLX 0 DTE (expiring 4/17/2025) options today. I've noticed that they really didn't decay at all, even though they expire today. I'm wondering what the mechanism is to prevent this decay. In the BSM model, or even other models, theta decay is a predictable event and I would have expected the OTM options to decay to almost 0 before market close at 1:00 PM PST. As I type this it's 12:45 PM PST. NFLX is about 973 and the 0 DTE 1050 c, which is an 11 delta call, is still valued at 3.35. The 0 DTE 900 p is worth about 3.75. The market closes at 1:00 PM PST and options expire at 2:30 PM PST.

How do MM's prevent the decay of these? Do they simply just keep the bid / ask elevated? So they are continually increasing the bid / ask to counteract the decay? Do they continually increase the IV to counteract theta? option modeling for contract pricing usually only involves spot, strike, risk free rate, volatility, and time.

Maybe I'm making much ado about nothing, but I find it interesting. Thanks.

[outerwestside]

Interesting. Can we get back to stocks to buy on dips?