Trade Idea | NFLX | Bear Put Debit Spread Strategy
Updated
I have been observing the price action of Netflix for the past days and it seems to me that it is showing some weaknesses at this level. Next earnings release will be on October 17, what ever the result is, in my opinion, profit taking can happen at this level.
Shorting this one will be expensive as NFLX trades at around $707.35 at last week close and the risk of loss will be uncertain if this will try to record a new high, while the risk in using the bear put debit strategy is only limited to the debit paid at entry, i.e. the amount I paid, is the maximum risk for this trade.
I will be looking at Oct25 575/570 Bear Put Debit Spreads and Oct25 600/595 and the contracts I will be trading will depends on where I am comfortable.
Why am I bearish?
Technically, I like fading the trade on top especially if I think the move already priced in the next earnings result. Fundamentally, the engagement growth in YouTube and other similar streaming platforms like Tubi, Pluto, Prime Video is increasing, even though some platform's content is not that great but sooner or later they'll catch up and eat the market share of Netflix.
-BB
Shorting this one will be expensive as NFLX trades at around $707.35 at last week close and the risk of loss will be uncertain if this will try to record a new high, while the risk in using the bear put debit strategy is only limited to the debit paid at entry, i.e. the amount I paid, is the maximum risk for this trade.
I will be looking at Oct25 575/570 Bear Put Debit Spreads and Oct25 600/595 and the contracts I will be trading will depends on where I am comfortable.
Why am I bearish?
Technically, I like fading the trade on top especially if I think the move already priced in the next earnings result. Fundamentally, the engagement growth in YouTube and other similar streaming platforms like Tubi, Pluto, Prime Video is increasing, even though some platform's content is not that great but sooner or later they'll catch up and eat the market share of Netflix.
-BB
Trade active
Opening this trade after forming a double top on a daily time frame. Bear Put Debit Spread trade adjusted to Oct25 705/700 Bear Put Debit Spread and bidding at 2.00/contractTrade closed manually
Closed this trade at a loss.
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