$Netflix(NFLX)$ - While the outlook seems positive, option flows are skewed towards bearish spreads, though that doesn't necessarily mean the earnings will disappoint. Here are some notable trades for reference:
Calendar Spread
Buy $NFLX 20240719 650.0 PUT$
Sell $NFLX 20240726 650.0 PUT$Bearish Put Spread
Buy $NFLX 20250117 590.0 PUT$ x1
Sel $NFLX 20250117 470.0 PUT$ x2
(Not a 1:1 ratio, buying 1 lot of 590 puts, selling 2 lots of 470 puts)Iron Condor
Buy $NFLX 20240719 560.0 PUT$
Sell $NFLX 20240719 570.0 PUT$
Sell $NFLX 20240719 740.0 CALL$
Buy $NFLX 20240719 750.0 CALL$
Personally, I don't find these trades very directionally insightful. They seem like generic "let's put on some Netflix trades" that a desk may put on when asked by management, especially that last iron condor which is a very typical volatility trade structure. For those looking to trade Netflix earnings, these could serve as references.
My expectation leans towards a pullback, more out of habit than substantive reasons, but I also lack strong conviction for an outright directional trade. So I plan to reassess opportunities after earnings.
My bearish Netflix bias partly stems from the recent put spread flows seen in SPY and QQQ options, like the SPY 544 put spread buyers.
QQQ also saw a strangle trade this week: Buying the $QQQ 20240719 489.0 PUT$ and the $QQQ 20240719 503.0 CALL$
Earnings week volatility is unlikely to be straightforward.
$Financial Select Sector SPDR Fund(XLF)$
In contrast to the cautious index flows, the financials sector has seen aggressive call buying like the $XLF 20240816 45.0 CALL$ and $XLF 20240920 35.0 CALL$ .
To potentially join the bullish tilt, selling the$XLF 20240816 42.0 PUT$ could be an approach.
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