Presidents Day Sale: 12 Unbeatable Trades at Sale Prices
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Netflix (NFLX)
Cocooning Americans Put Those Home Theaters to Work
By Michael Shulman
Since they are not traveling as much, Americans are "cocooning" -- they always do so during crises. The term "cocooning," invented by a woman with the wonderful name of Faith Popcorn, means people stay at home, entertaining, hanging out, and doing whatever with friends and family.
So they will watch movies. Netflix (NFLX) is the ultimate cocooning play on the need to for many to rent rather than buy DVDs -- especially the new high-definition Blu-ray DVDs.
The stock is on a tear but held up much better than the market when it broke earlier last week. If you buy the stock, sell the calls and don’t be greedy. You can sell the NFLX June 42.50 Calls for three bucks or more, giving you a near 20% return if you are called out and some cash to buy puts on the general market if there is a big downturn.
