With NFLX Up 50%, Trader Places Massive Bullish Bet Ahead Of Earnings

You have to laugh really.

From the lows after the Mnuchin Massacre on Boxing Day, Netflix stock price is up a stunning 53% (more than double the already impressive moves of the rest of the FANG stocks)…

The last few days have surged further after the firm hiked prices, but all eyes will be focused on the screens after the close tonight when the streaming company releases its earnings (whose expectations have been crushed in recent months)…

However, that is not enough to put off one courageous (or foolhardy) trader as Bloomberg reports, at least one investor is placing a massive bullish wager on communications stocks leading up to Netflix’s earnings report tonight.

The $3.8 billion Communication Services Select Sector SPDR Fund, or XLC, took in over $662 million on Wednesday, the most since October (which did not work out so well)…

And, as Bloomberg reports, a large chunk of that appears to have come from one trader, who bought close to 5 million shares worth more than $223 million.

“It’s an interesting trade ahead of Netflix’s earnings since the company has a notable weighting in XLC,” said Christian Fromhertz, chief executive officer of Tribeca Trade Group.

“Google — which reports in early February — makes up close to a quarter of the ETF. So it looks like a trader wants to have exposure before the big earnings reports.”

It seems a dovish shift from The Fed was all it took to melt stocks up to here but the question is – can it last? We (and the trader above) will be watching closely after the bell.