What Strategy to Choose after NFLX's Mixed Q1 Earnings?

As previously expected, $Netflix (NFLX) $’s Q1 earnings report

1. Previous implied volatility implied a price change at least 10%, so the stock price instantly tumbled 12% just a few minutes after the announcing, as low to $298, many quantse orders triggered, and a large number of investors' orders for stopping profits and losses or opening positions were also set in this position. At the same time, $300 is also a support level.

2. It rebounce quite soon, erasing all the declines of the report, and even rose slightly by 2% at one time, and then wandered around the original closing price, which meant that this volitility of "earnings trading" had been digested almost in only half an hour.

It shows that the market's expectations in divergence

For Shorts, Subscribers are declining, and because of the processing of shared accounts, the number of subscriptions may be unstable in the next few quarters, and even Q2 may fall short of expectations again;

For Longs, The company pays more attention to monetization ability. Price increase, multi-package choice and advertising can all increase revenue, and operating expenses and content expenses are under control. The profit rate may improve for a long time, and the free cash flow will reach a new high.

Investors focusing on subs now have to pay more attention to monetization, which could result in:

1. Growth attribution decrease;

2. Long-term Value attributing increase.

In fact, since 22Q4, Netflix has attracted many investors (especially institutional investors) because of its advertising business, and has also become one of the few anti-inflation optional consumer stocks in the inflation.

NFLX's share price returned 34%, 25% and 16% in the past three quarters, while $S&P 500(.SPX)$ index returned-5%, 7% and 7% in the same period.

The report, which seems to be missed means a lot more, it is not so positive but not that negative, which makes NFLX's share price sticker in the current range.

My Trading.

1. SELL PUT in lower prices, such as an exercise price of 280-300 US dollars due in about one month;

2. Reverse Strangle, such as selling PUT for $280-300 and CALL for $370-400.

   Reverse Vertical

Happy Trading!