Options Traders Bet Netflix Slide Ends at Earnings — SkimNews
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- Netflix stock sits nearly 50% off all-time highs heading into earnings, weighed down by C-suite shakeups, corporate layoffs, and a failed takeover bid.
- Options pricing implies a 9% post-earnings move — the highest since Q3 2022's 11% implied move, which Netflix beat by surging 13% that quarter.
- Call positioning dominated the Tuesday tape, with 1.5x more calls bought than puts and put-selling running at more than 150% of average daily volume; six of the ten most-bought contracts were calls, five expiring that Friday.
- The single largest trade on Netflix was a roughly $2 million sale of at-the-money Nov. 20 expiration 70-strike puts — described in the article as a "major vote of confidence" for a beaten-down stock.
- 80-strike call buyers snapped up more than 3,500 contracts expiring Friday for over $210K in premium — a position requiring a 20% surge to break even, more than double the implied upside move.
- Netflix's stock has posted a median move of 7.25% over the last eight quarters, making the current 9% implied move unusually rich by recent standards.
Why it matters: A 9% implied move is the largest since Q3 2022, and the call-heavy, put-selling skew points to options traders expecting Netflix's streak of post-earnings drops to finally break. If Netflix merely matches its Q3 2022 beat — a 13% surge that crushed the implied move — the stock would comfortably outperform expectations and chip away at a nearly 50% decline from highs.
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