Bearish Put/Call Imbalance at $1165-$1230 Signals Risk-On Strategy for NFLX: How Traders Can Position for Volatility and Earnings Catalysts

• NFLX trades at $1206.77, down 0.12% intraday, with RSI at 41.36 and MACD histogram at -1.97, signaling oversold conditions.
• Options data reveals a 1.27 put/call open interest ratio, with heavy put OI at $1165 and call OI at $1230, suggesting bearish positioning.
• Upcoming Q2 2025 earnings on July 17 and Q3 on October 17 could drive volatility, with Netflix’s live sports and ESG initiatives as key catalysts.

The confluence of technical indicators and options market sentiment paints a nuanced picture for Netflix (NFLX). While the stock faces short-term bearish pressure, oversold conditions and strategic options positioning hint at a potential rebound. Traders must balance the bearish open interest skew with bullish catalysts like ESG progress and live sports expansion to navigate the near-term volatility.

Decoding the Options Imbalance: A Bearish Bias with Hidden Bullish Catalysts

The options chain for NFLX reveals a stark bearish tilt, with put open interest (OI) outpacing calls by a 1.27 ratio. This Friday’s top OTM puts are concentrated at $1165 (OI: 2246) and $1155 (OI: 2111), while calls peak at $1230 (OI: 1542) and $1250 (OI: 1422). The next Friday’s options show a similar pattern, with puts at $1165 (OI: 1102) and calls at $1230 (OI: 1156). This distribution suggests institutional and retail investors are hedging against a potential drop to $1150–$1165, while some bullish positioning exists for a rebound to $1230–$1250.

The bearish skew aligns with the RSI at 41.36 and MACD histogram at -1.97, both indicating oversold conditions. However, the Bollinger Bands show the price is near the lower band at $1181.33, suggesting a technical rebound could occur if buyers step in. The 30D support at $1243.80 and 200D resistance at $1086.06 further complicate the outlook, as the stock remains below its 30D and 100D moving averages. Traders should monitor whether the price holds above $1181.33 or breaks below $1165, as either scenario could trigger a directional move.

News Flow: Growth Ambitions vs. Short-Term Skepticism

Netflix’s recent news highlights a dual narrative. The launch of the “Moments” feature and expansion into live sports (e.g., Canelo vs. Crawford) signal aggressive growth strategies, which could drive user engagement and subscriber growth. The 15-year carbon credit deal with AFF also strengthens ESG credentials, appealing to environmentally conscious investors. However, Zacks’ downgrade to “Hold” and insider sales by CFO Spencer Neumann and co-founder Reed Hastings (selling 98.5% of his stake) introduce uncertainty. Institutional investors like AQR Capital and Amundi have mixed positions, with some adding shares while others reduce exposure.

The market’s reaction to these developments is mixed. While Wall Street analysts maintain “Buy” ratings, the insider sales and Zacks downgrade have tempered optimism. The key question is whether the stock can overcome short-term skepticism and execute on its growth initiatives. If Netflix’s Q2 2025 earnings (July 17) show strong subscriber growth and revenue, the stock could rally toward $1243.80. Conversely, weak results or continued insider selling could push the price toward $1165–$1155.

Actionable Trading Opportunities: Calls for Breakouts, Puts for Protection

For options traders, the most attractive setups involve leveraging the bearish skew while capitalizing on potential rebounds. Here are specific strategies:

1. Bearish Put Play: $1165 Puts (This Friday)

• Why: The $1165 put has the highest OI (2246) this Friday, indicating a key price level where sellers expect a drop. If NFLX closes below $1165, the puts could see significant gains.
• Entry: Buy NFLX 25071165P (strike $1165, expiring Friday) if the price dips below $1181.33.
• Target: $1155–$1140 if the stock breaks the lower Bollinger Band.

1. Bullish Call Play: $1230 Calls (Next Friday)

• Why: The $1230 call has the highest OI (1156) next Friday, reflecting bullish positioning for a rebound. A break above $1230 could trigger a rally toward $1250.
• Entry: Buy NFLX 25071230C (strike $1230, expiring next Friday) if the price holds above $1200.
• Target: $1250–$1260 if the stock closes above $1230.

1. Stock Positioning: Buy on Dips to $1181.33

• Why: The lower Bollinger Band at $1181.33 and 30D support at $1243.80 suggest a potential bounce zone. A break below $1181.33 would signal further weakness.
• Entry: Consider buying NFLX near $1181.33 if the price holds above this level.
• Target: $1222.65 (middle Bollinger Band) if the stock rebounds.

Volatility on the Horizon: Navigating Earnings and Strategic Moves

The coming months will test NFLX’s resilience. The July 17 Q2 2025 earnings report and October 17 Q3 report will be critical junctures. A strong earnings beat could validate the stock’s long-term potential, while a miss could exacerbate the bearish sentiment. Additionally, Netflix’s push into live sports (e.g., MLB Home Run Derby) and physical experiences like Netflix House could drive growth, but execution risks remain.

Traders should adopt a balanced approach: use the bearish put skew to hedge downside risk while positioning for a potential rebound with calls or stock purchases near key support levels. The key is to stay nimble, adjusting positions based on earnings results and news flow. With the stock trading near oversold territory and a clear options imbalance, the next few weeks could offer high-reward opportunities for those who act decisively.