I read some Netflix's forecasts. To sum up, Q1 has no any good dramas, andits competitors are extremely strong. In March, it lost more than 1 million paid users while it stopped Russian business. The conflict between Russia and Ukraine has a certain impact on new paid subscriptions in Europe. $Netflix(NFLX)$
Netflix Q1 Earnings are Coming: 3 Most Important Things to Watch on April 19
I noticed that Wall street's expectations for NFLX have been adjusted very low. Will it rebound sharply as long as it slightly exceeds expectations?
From the perspective of options, the total amount of PUTs will expire next week is higher than CALLs, but most of CALLs is OTM, mainly around $400, but most of PUTs are betting around $350.
PUT: 350, 330, 320, 310, 300 , have a lot of positions
CALL: 390, 400, 420 and 440 , all bet over 1,000 contracts
From unusual options, there are many people trade Straddle. Guess it is really not suitable for one-way short selling of stocks with low expectations.
However, on April 12, a big order of PUT at $250. is it $400,000 gamble?
Price at $250 corresponds to the low point of NFLX in 2019. It means that the lowest point of NFLX is $290 when trading curbed in 2020.
Look at the graphic, Netflix does not have an obvious bottom at present. If the market is crash, NFLX is not surprising to break $300.
After Q4 earnings, the stock price has plummeted by 21%, and the highest rebound position is $460. If it rises after this earnings, the price will not exceed $460.
If I choose ±$50 to trade straddle, that buy both CALL at $400 and PUT at $300, there is an obvious IV guidance, and the IV of PUT has exceeded 90%, much higher than the CALL.
From the analysis of Tiger's IV curve, it can be seen that the volatility curve is currently to the left, and it seems that more people buy PUT for protection or bet down than buy CALL.
To sum up, there are more people choose PUT than CALL in NFLX options trading. There are two situations, one is that people who hold NFLX positions and buy PUTs for position protection. And the other is that they bet that earnings will lead price to fall. Anyway, there are more bearish on NFLX Q1 resuls.
All kinds of market analysis and prediction are very pessimistic about Netflix's Q1 result, so will it turns against? Will Netflix release some optimistic expectations for the second half of the year after the poor Q1 result is announced? JP Morgan analyst said earlier that athough Netflix was not good in the first half of the year, but it would have a strong performance in the second half of 2022. However, I think that the straddle will be more suitable for NFLX without betting on the direction.
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