Netflix has faced a series of challenges, including a declining stock price, executive changes, layoffs, and a failed acquisition attempt, leading to a nearly 50% drop from its all-time highs. However, current options trading suggests a more optimistic outlook. The implied post-earnings move for Netflix is 9%, the highest since Q3 2022, when the stock actually rose 13%.
Notably, there has been a surge in call options, with one-and-a-half times more calls purchased than puts, indicating bullish sentiment. A significant trade involved selling $2 million worth of 70-strike puts, which are at the money, reflecting confidence in the stock's recovery.
Additionally, traders purchased over 3,500 80-strike calls, requiring a 20% increase in stock price to break even by Friday, suggesting that many believe Netflix's earnings losing streak may soon end