Entry is Key...Exit is Everything! ^TM

Oh what a day to CELEBRATE!!!!  I bagged another White Whale!!!!!!!!!!!!  I kept some of the trades open to see if this bad boy just keeps on dropping!!!

Here is what I said back in July:

7/23/11 - Monday is the big day for NFLX, and with recent news that they are raising rates up to 60% has caused quite a backlash from their loyal customer base. Will this be a death nail in the companies meteoric rise? Probably not in the near future, but next earnings reports will be the tell-tale sign of this announcement.

NFLX briefly took out an all time high of $300 per share back on 7/13/11, and once the price increase announcement was made, the stock has sold off since. Of course the stock is substantially over-priced, but people buy and pay a premium because of FUTURE projections that NFLX will continue to grow millions of "new" customers; however, once they top out—and they will top out due to attrition, competition and operating costs—this stock will fall hard and fast and my Lotto Option Trades will be there waiting to bag that White Whale and catch a boat load of cash too!—For now, any trades done on stocks like this have to be straddles unless you are just willing to gamble and pick a side.

My plays are heavy on the put side with enough calls to pay back the puts purchased should the stock rise to new heights.

PROOF UPGRADE BUYING IS FOR SUCKERS ON STOCK WITH NO INTRINSIC VALUE!!!

Speaking of rising, the stock was upgraded by a major brokerage with a price target of $315+. I for one am always suspect when there are upgrades on stocks that have speculated growth.

Looking over the facts on this stock, you can see their actual book value (Book value is the "real value" of a stock if you liquidated all assets and paid all debts) is $52.54 and NFLX Forward P/E is  $41.59; however, the balance sheet Book Value Per Share says they are worth $5.25 per share.

This stock is a "loved" stock, but 85% of the shares are held by institutions, so if the love dies, the stock dives!

Get ready for some price action Monday!!

NFLX gets CRUSHED in after hours trading and the love affair is OVER. This stock is heading LOWER!!!!

My put plays are going to BANK tomorrow and the rest of the month! If there is any bounce I am shorting big time.

10/24/11 - Here are the trades on NFLX for today:

NFLX has fallen from investors blind ambition to drive the stock price to the moon. With a failing business model on the DVD rentals by mail and stiff competition, contract debacles with content providers and just STUPID decisions by the executive branch, this stock is pretty much going to see much lower prices going forward.

In the long run, they are going to have to really deliver some HUGE RESULTS over then next several quarters or they are going to be feeling a lot of pain—possibly a takeover wanted or hostile.

Monday is earnings and the big question on the minds of analysts will most definitely be the subscription stats. If they have lost more subscribers than expected (me being one) then the wholesale selling will begin. If they kept levels pretty much even and maybe even recovered, then price will initially move higher but will resume a downtrend over the next year or maybe even more. After all, the actual Book Value of this stock is only $17.53 per share and forward P/E is $19.06, so if you plan on paying a 6-10+ multiple for a stock that basically has NO infrastructure other than a fickle subscription base, then I have some old shares of BS I would like to sell you for $174 each!

Do you want your investment in NFLX to look like this BS chart???

Oh, wait a minute, NFLX almost looks exactly like this

Of course, had you been following my advice on this stock, then you have made a HUGE profit on the way back down to reality.

There is plenty of room to fall back to 2004 highs in the high 40's; and at best, a rise back to $160-170 before the selling continues.

You MUST do a straddle on this one and Monday is perfect since options will be good for an entire month. Of course, there will be a ridiculous amount of premium packed into both calls and puts, so we have to bite the bullet and take the ride on this one. Do not get greedy and expect a huge profit on the calls. Just be sure to keep a tight stop and take some profits off the table. If this stock fails to take out $160 on a base, SHORT and hold on!

I am looking at the following strike prices:

Calls: $125

Puts: $100 and $90 and 70's for the Lotto play $70.