Netflix expected to move 14% on earnings

Netflix is far and away the best S&P 500 performer this year, rising more than 120 percent. And traders are betting on another big move ahead for the Internet media giant, off of the earnings that Netflix is set to report after Wednesday's bell.

In order to buy the two options contracts that would expose a trader to the fullness of the stock's moves through the end of the week, that trader would have to spend some $15.20, or 14 percent of the price of the stock.

"It's expected to be another volatile earnings [reaction] for Netflix, but put that in perspective — volatility is what we normally see from Netflix," commented Stacey Gilbert, head of derivative strategy at Susquehanna, in a Tuesday "Trading Nation" segment.

Indeed, this implied move is actually a tad smaller than the three jumps that Netflix has already seen off of earnings this year. Last quarter, the company rose 17 percent between the close of trading on Wednesday ahead of its earnings report and its close that Friday; the quarter before, it rose 20 percent in the two days after earnings.

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If one is simply expecting the stock to rise, he can get a better deal, as he can buy upside exposure to the shares for about 7 percent of the stock price, by purchasing the weekly at-the-money call as of midday Wednesday.

Tuesday on CNBC's "Fast Money," Wedbush analyst Michael Pachter said that notwithstanding his very bearish price target, the stock will beat quarterly estimates "quite easily," perhaps driving it higher in the days ahead.

Read MoreStreet's most bearish Netflix analyst thinks stock will pop


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Trading Nation is a multimedia financial news program that shows investors and traders how to use the news of the day to their advantage. This is where experts from across the financial world – including macro strategists, technical analysts, stock-pickers, and traders who specialize in options, currencies, and fixed income – come together to find the best ways to capitalize on recent developments in the market. Trading Nation: Where headlines become opportunities.

Michael Santoli

Michael Santoli joined CNBC in October 2015 as a Senior Markets Commentator, based at the network's Global Headquarters in Englewood Cliffs, N.J.  Santoli brings his extensive markets expertise to CNBC's Business Day programming, with a regular appearance on CNBC's “Closing Bell (M-F, 3PM-5PM ET).   In addition, he contributes to CNBCand CNBC PRO, writing regular articles and creating original digital videos.

Previously, Santoli was a Senior Columnist at Yahoo Finance, where he wrote analysis and commentary on the stock market, corporate news and the economy. He also appeared on Yahoo Finance video programs, where he offered insights on the most important business stories of the day, and was a regular contributor to CNBC and other networks.

Follow Michael Santoli on Twitter @michaelsantoli

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