Well, what a disappointing result for $Netflix(NFLX)$. Since hitting all time high of $700 in Nov 2021, it had been downtrending. A 63% drop in their share price over 5 months speak volume. Will it get worse? Possibly since overall sentiment had been weak and negative.
Will I invest in it? Hell no 😂. Will I trade it? Yes. So how can we take advantage of headline news to trade $Netflix(NFLX)$after its earning release? Is there a cheaper way to trade it without risking a large amount of money?
I'm thinking to trade $Netflix(NFLX)$via broken wing butterfly using put 250/230/220 with DTE 6 May 2022.
Why? It fits both criteria of my trade plan. I am bearish on this stock and BWB is a cheaper way to trade it. I'm risking no more than $100 to take a short term bet on the direction of the trade with a decent risk reward. The strike prices I choose are based on price level it could possibly hit in the coming weeks. This is subjective and at own discretion.
Of course there are also other bearish option strategies to take advantage of depending on your own level of bearishness, one can take a bearish synthetic approach or even bear put spread etc.
As usual, my sharing is for educational purposes only. It is not a buy or sell recommendation. Please do your own due diligence and understand the risks involved before taking any trade.
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