Q1 financial report exceeded expectations, how to use options to do more NetEase?
The Q1 financial report exceeded expectations, and the game business increased by 12% year-on-year to become the core engine! Netease's intraday stock price is approaching the highest price in history;
On the news,$NetEase (NTES) $Released first-quarter earnings on Thursday. According to core financial data, during the reporting period, the company achieved revenue of 28.829 billion yuan, a year-on-year increase of 7.4%; Non-GAAP net profit attributable to the parent company reached 11.236 billion yuan, a year-on-year increase of 32%. Among them, the revenue from games and related value-added services was 24 billion yuan, a year-on-year increase of 12.1%, accounting for 83.2% of the total revenue.
NetEase pointed out in its first quarterly report that a number of new games launched recently have achieved good results. For example, "Marvel Competition" quickly topped Steam's global best-selling list after the second season update was released in April 2025. "Sixteen Sounds of Yanyun" has been very popular since its launch in December 2024. As of March 2025, the number of registered players has exceeded 30 million.
According to Citigroup, NetEase's game revenue of 23.4 billion yuan in the first quarter was stronger than expected, thanks to the contribution of successful games such as "Sixteen Sounds of Yanyun", the continued positive momentum since the return of Blizzard Games, and series such as "FWJ" The stability of games. The bank raised the target price of NetEase American Depositary Receipts from $118 to $156 and maintained a buy rating.
For investors who want to go long on NetEase after the financial report, they can consider using selling put options to go long on NetEase.
Options Strategy: Using Put Options to Go Long NetEase
The current NetEase price is US $119, we can sell itExpires June 20, 2025, exercise price 115, premium $330Put Option (Put Option) to go long NetEase.
This strategy can not only make profits when NetEase rises, but even if NetEase trades sideways or falls slightly, it can still rely on premium to earn profits.
Current price: $119
Contract type: Put option (Put) expiring on June 20, 2025
Strike price: $115
Premium revenue: $330/share (each share corresponds to 100 shares)
This strategy sells put options and collects premium first. If the stock price does not fall below the exercise price at expiration, the option will become invalid and the seller will retain premium in full; If the stock price falls below the strike price, the underlying price needs to be bought at $115.
Maximum Profit
If the closing price of NetEase ADR is ≥ $115 at expiration, the put option expires and expires, and the seller retains all premium rights.
Maximum gain = $330
Break ‑ even Point
Break-even price = exercise price − (premium ÷ contract unit)
= 115 − （330 ÷ 100）
= 115 − 3.30
= $111.70
Maximum Loss
If NetEase ADR falls to US $0 at expiration, the seller needs to buy 100 shares at US $115 per share, but has received US $330 premium:
Maximum loss = (115 − 0) × 100 − 330
= 11,500 − 330
= US $11,170
brief summary
Maximum benefit: $330
Break-even point: $111.70
Maximum lossUS $11,170
This strategy is suitable for investors who are bullish in the medium term and tolerate a certain correction, but they need to reserve enough margin and consider cooperating with stop loss or hedging tools to control risks.
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