Options Alert: Are the Puts in Netflix Bearish?
Netflix has been crumbling, and options traders are reacting to the move.
Two large transactions were detected yesterday with the streaming-video company mired in its sharpest slide in four years.
First, some 54,530 July 75 puts traded for $4.50 at the same time as an identically sized block of January 65 puts for $4.30.
Another transaction followed less than an hour later: 8,600 August 72 puts for $4 and 8,600 January 64 puts for $4.
In both cases, volume was below open interest in the shorter-dated contracts but not the longer-dated contracts. That suggests existing positions that would have expired this summer were closed and rolled to early next year.
Puts fix the price where a security can be sold. They can appreciate when shares fall. Investors can also sell puts to collect income, which can obligate them to buy shares at a loss.
Time for a Bounce?
It appears that the July and August puts were both purchased, while the January contracts were sold. That suggests traders previously sold puts, looking for NFLX to stay above $75 and $72. With the stock below and near those levels, they apparently closed the shorter-dated options and rolled into the future. The adjustments provide time for a potential bounce, while also lowering the prices where they're on the hook to own the stock.
The stock has also returned to a price gap from October 2024. Do they think it will provide support?
NFLX fell 0.1 percent to $72.82 yesterday and is down 15 percent so far in June. It's on track for its biggest monthly decline since April 2022, during a bear market in the broader S&P 500.
The company rebounded from that previous selloff by using advertising to boost revenue. That helped drive its shares higher through mid-2025, but results have struggled since. The last set of numbers on April 16 beat estimates but guidance disappointed.
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