Netflix (NFLX) Options Signal Bearish Sentiment: Put/Call Imbalance at $1165–$1300 Suggests Strategic Shorting Opportunities

• Current price near $1,210.06, up 0.15% with RSI at 41.36 (oversold) but MACD (-1.81) signaling bearish momentum.
• Put/call open interest ratio of 1.27 indicates bearish bias, with top OTM puts at $1165 (OI: 2,246) and calls at $1290 (OI: 2,557).
• Upcoming Q2 2025 earnings (July 17) and Q3 guidance (October 21) could trigger volatility amid ad-tier expansion and competitive pressures.

The options market is pricing in a bearish bias for Netflix, with a put/call open interest ratio of 1.27 and heavy positioning at key strikes. While the stock trades near $1,210, technical indicators and options data suggest a higher probability of downside risk, particularly if the 200-day moving average ($1,086.06) fails to hold. Here’s how to navigate the setup.

Bearish Put Dominance and Call Resistance at Key Strikes

The options chain reveals a stark imbalance: put open interest totals 312,038 contracts versus 245,345 for calls. This 1.27 ratio underscores bearish sentiment, with the top OTM puts expiring this Friday concentrated at $1165 (OI: 2,246) and $1155 (OI: 2,111). These strikes align with the lower Bollinger Band ($1,181.33) and the 200-day MA, suggesting a potential support zone where sellers may step in. Conversely, call open interest peaks at $1290 (OI: 2,557) and $1300 (OI: 1,822), indicating resistance above $1,250. Traders should monitor whether the stock breaks below $1,165 (a 10.5% drop from current levels) or rallies past $1,290, which could trigger a shift in sentiment.

The absence of notable block trades (none reported) implies no major institutional positioning to skew the market, but the heavy put OI at $1165 suggests a potential short-term target for bears. However, the 30-day support level ($1,243.79–$1,245.29) and upcoming Q2 earnings report could provide a floor for the stock.

News-Driven Context: Growth Optimism vs. Valuation Concerns

Netflix’s recent news highlights a mixed narrative. The company’s ad-tier expansion, physical experiences (Netflix House), and strategic partnerships (Amazon, AMC) signal long-term growth potential. Analysts at Loop Capital and Needham have raised price targets to $1,350–$1,450, citing strong Q3 engagement and content slate. However, the stock’s 74% annual gain has led to valuation debates, with some analysts arguing it’s overvalued at $1,228.50 (vs. a DCF fair value of $797). The options market appears to price in risks from slowing growth (4% dip in recent months) and competitive pressures, particularly as Disney+ and Hulu expand their ad-supported tiers. While the news flow supports long-term optimism, the current technical setup suggests near-term volatility as the market digests these dynamics.

Actionable Trade Ideas: Shorting at $1165–$1290 and Long Calls for Breakouts

For options traders, the $1165 put (expiring Friday) and $1155 put (next Friday) offer high-probability shorting opportunities if the stock breaks below $1,181.33 (lower Bollinger Band). These strikes align with key support levels and could see increased liquidity if the 200-day MA fails. Conversely, the $1290 call (Friday) and $1260 call (next Friday) are ideal for bullish bets if the stock rallies past $1,250, leveraging the heavy call OI at these strikes. For stock traders, consider entering short positions near $1,165 with a stop-loss above $1,200 (intraday high) and a target at $1,086 (200-day MA). Alternatively, long positions could target $1,243.79 (30-day support) with a stop below $1,200. The $1,230 call (next Friday) also offers a leveraged play if the stock breaks above the 30-day moving average ($1,222.47).

Volatility on the Horizon: Navigating Earnings and Strategic Moves

The next two months will be critical for Netflix. Q2 earnings on July 17 and Q3 guidance on October 21 could either validate or challenge the current bearish options setup. Additionally, Greg Peters’ presentation at the Goldman Sachs conference (September 8) may provide clarity on the company’s ad-tier and content strategies. Traders should also watch the $1,200 put (next Friday) as a potential hedge against a sharp decline, given the stock’s proximity to key technical levels. While the long-term fundamentals remain strong, the near-term technicals and options data suggest a cautious approach, with opportunities to capitalize on volatility through strategic shorting and breakout plays.