TCB: I wasn’t afraid of this trade at all. The evidence I had gathered and the charts clearly said it would pop. I knew the talking heads (TV) had bad mouthed NFLX because “they don’t get it” but all the big houses (see below) totally “got it”. I just knew that I knew that I knew it would go up. The chart gap and measured move was just too clear for a pop.
This was one of those things I have been working on, "Darcy's measured move of the gap", from the half gap from 1/23 -1/24 measures the low the stock hit on several days and held. The stock did not do a second measured gap up I fully expected one more measured gap up but instead I got a measure and a half gap up.
BCT.... yes I went through earnings. Yes I know about Gary's Earnings rules in 1-5 but for me this was too sweet to let alone.
CHZTrader...I did not consider it a risk at all. The gaps clearly told me the trade, even through earnings, would be up.
As I pointed out about the Daily chart...the Gap off 1/23 to 1/24 never closed. This was the first GAP and it told me that this stock was on fire when the gap (the window) never closed.
Next the upgrades before earnings from Canter Fitzgerald, Goldman Sacs, Barclays, Capital IQ and the news about Carl Ichan let me be almost 100% sure NFLX would beat. Cantor Fitzgerald reported 4/22 that they expected NFLX to have strong subscriber and rev. growth. You do not get firms like these to make these sort of statements willy-nilly.
I exited because I had a GTC set @ 46.05. I was sold out @ 46.10. I watched it this morning and I could have set my GTC higher but I really don't think I would have been sold out because of how it was moving right at the open.
Cost: I bought 2 contracts for $17.10 = $3,435.02 In my way of looking at it since I use $3,000.00 on most all my trades I really only risked $435.02 more than what I usually risk on all trades.