We hold eight December 400-410 call spreads with an effective cost basis of 0.40. Continue to offer half of them for 1.10, good-till-canceled. With just two weeks to go before our way out-of-the-money spreads expire, the stock’s stall this week has been frustrating. This was especially true yesterday, when NFLX ended the session with a $6 loss even though most of the other high-fliers recovered earlier losses in the final hour. Is there perhaps negative news in the offing? We’ll find out soon enough. (See the attached chart for another possible explanation.) In the meantime, take encouragement from the fact that the Santa rally — I really do hate that term — is due to kick off next week if seasonal influences that have worked in the past continue to obtain. _______ UPDATE (December 9, 12:30 a.m.): It will be do or die for our spread today and tomorrow, since, after that the stock will need to rise $4 a day just to offset time decay. For now, lower the offer on half the spreads to 0.90. The weight of what you’re feeling can be attributed to the fact that everyone seems to have made the same bet that we did: NFLX as a high-beta market leader in December.
