Bullish Netflix Option Trader Sitting on $16 Million Paper Gain

An options trader who bet big on a Netflix Inc. rally is sitting on a roughly $16 million paper gain as shares soared after the streaming giant pulled its bid for Warner Bros. Discovery Inc.

With Netflix dropping out, that clears the way for rival bidder Paramount Skydance Corp. to clinch its $111 billion deal for the historic Hollywood studio. Netflix shares jumped as much as 12% Friday, indicating that investors were happy to see the company walk away from the deal.

Read more: Paramount Beats Netflix in Months-Long Fight for Warner Bros.

The options speculator spent about $13.8 million ...