John Lothian News – Markets/Derivatives

Wall Street Turns to Complex Trades to Dodge AI ‘Implosions’

An options trader who heavily bought Netflix call options is now sitting on an estimated $16 million unrealized profit. The profit materialized after Warner Bros. withdrew its proposed acquisition of Netflix, triggering a sharp rally in Netflix shares. The trader’s bet relied on the expectation that Netflix’s growth trajectory would persist despite the failed deal, and the stock’s surge pushed the options deep into the money. The episode illustrates how leveraged options can produce outsized gains—or losses—when M&A news moves markets.