To The Moon

$Netflix(NFLX)$ - 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:

1. Calendar Spread
   Buy $NFLX 20240719 650.0 PUT$ 
   Sell $NFLX 20240726 650.0 PUT$ 

2. 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)

3. 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.

$Invesco QQQ(QQQ)$

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.