Sarah Wasserman (swasserman@sir-inc.com) Crocs, Inc. (CROX) and Caterpillar Inc. (CAT) aren't the only stocks rallying to new highs today, as DVD diva Netflix, Inc. (NFLX) also managed to tag a fresh all-time high of $187.80. Today's technical feat is nothing new for NFLX, though, as the shares have been hitting a series of new highs since August. During this time, the stock's ascent has been underlined by strong support from its 10-week and 20-week moving averages.
Option players have flocked to high-flying NFLX today, with roughly 89,000 contracts crossing the tape so far -- more than double the equity's expected daily volume of around 32,000 contracts. Calls have comprised the bulk of today's volume, with some 56,000 of these bullishly oriented options changing hands.
NFLX's December 190 call has attracted quite a bit of attention, with over 3,700 contracts changing hands on this strike -- the majority of which traded at the ask price, indicating that they were likely purchased. With today's volume exceeding open interest at this strike, it appears that fresh bullish positions are being added here. By buying to open the December 190 call, option players are counting on NFLX to muscle above the $190 level over the next four weeks.
Despite its technical prowess, option players maintain a skeptical attitude toward NFLX, as the stock's Schaeffer's put/call open interest ratio (SOIR) of 1.27 reveals that puts comfortably outnumber calls among options in the front three months. What's more, this ratio ranks in the bearish 64th annual percentile. As NFLX continues its record-setting rally, a capitulation by these remaining skeptics could add fresh buying pressure to the shares.
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