After a challenging year marked by a nearly 20% decline and consecutive sell-offs following earnings reports, options traders are now favoring Netflix, with call volumes significantly outpacing puts. Data from ThinkOrSwim reveals that call volumes doubled puts in recent sessions, suggesting a growing optimism.
Currently trading around $75, Netflix is at a critical technical juncture, testing a 200-week moving average and a previous resistance level from late 2021. Todd Gordon, founder and CIO at Inside Edge Capital, noted that if the $70 support holds, it may signal a potential recovery for the stock.
However, concerns remain as Netflix has not produced a major hit recently, with Nielsen reporting its lowest share of TV viewership in over a year. Rich Greenfield, co-founder and TMT analyst at LightShed Partners, highlighted that while engagement is growing in the U.S., overall viewership per subscriber has decreased, partly due to the mix of new ad-supported users who tend to watch less.
The most actively traded options include a 75-strike put, with significant selling activity indicating cautious sentiment among some traders. Overall, while there is bullish sentiment in the options market, Netflix's performance and viewer engagement remain critical factors to watch as earnings approach