It was December 28 when we recommended buying Netflix (NFLX:NASDAQ) March 2008 25 puts (QNQOE), speculating that the underlying would plunge sub-$23 on technicals and Apple iTunes news.
I remember it well. It was just weeks after Piper Jaffray upgraded the stock to a buy, days after Citigroup upgraded it to a Hold, and days after Credit Suisse raised price estimates from $30 to $33. Funny… They did nothing more than prove that it pays to ignore big banks. Do I have to remind you how they did with subprime bets?
Today, as the underlying stock trades at $22.73, the March 2008 25 put options trade at $3.60, a 106% gain in just weeks.
If you followed the advice, I’d love to hear how you did. You can e-mail me directly at TheTradingPit@yahoo.com. And be sure to stay tuned for our options service coming soon.
Congratulations on an easy gain.
