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Netflix (NFLX) shares rise on revenue optimism

Netflix (NFLX) had a 15.28% gain today on a press release before market open.

Netflix Roadshow 004
Image by RahulG. via Flickr

NFLX announced that it will offer it’s first unlimited streaming only subscription plan! The market took this news as extremely bullish and the stock rallied to close at $188.32.

Is it REALLY bullish? It certainly COULD be. Did it change this quarters results? Probably not. Next quarters? Maybe… So, we had a sentimental reaction to a potentially fundamental event.

I have to ask, have you tried the streaming video option? Even with a high bandwidth connection, it’s less than desired. We’ll see, but my suspicion is that until we get the next gen of internet hardware and the ability to download at much greater speeds, this isn’t as much of a boost as the market seems to think right now.

We’ve tried the streaming video from a number of sources and found it less than satisfactory. At this point, we’ll stick to our cable provider’s “On Demand” features.

I suspect that it won’t be long before NFLX is able to take really utilize the internet for downloading videos – just not yet.

So, as an options trader and spread trader, how do I play this? Cautiously. I’ll have to wait another day.

I wouldn’t be too surprised to see NFLX, AAPL, tech in general and the NASDAQ continue to power higher as technology usually leads the way in recovery.

Jeff McAllister
OptionsANIMAL Instructor

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