NFLX Options Signal $1,100 Put Protection Amid Tax-Driven Selloff – Here’s How to Play the Rebound

• Netflix (NFLX) plunged 9.8% after a $619M Brazil tax hit crushed Q3 earnings, despite $11.5B revenue in line with forecasts.
• Options market shows heavy put buying at $1,100 and $1,000 strikes, while calls at $1,300 and $1,400 see strong open interest.
• Technicals hint at a potential rebound: RSI at 67.56 suggests oversold territory, and Bollinger Bands show price near lower bounds.
• The stock’s 200D MA at $1,112 and 30D support at $1,198.63 could act as key levels in the coming days.

The Big Picture: A Bearish Setup with Hidden Bullish Catalysts

Netflix’s 9.8% drop after earnings isn’t just a tax story—it’s a textbook case of options-driven panic. The market’s fear is etched into the options chain: 4,881 puts at $1,100 and 4,296 at $1,000 (both expiring Friday) show investors hedging against further declines. But here’s the twist: the same data hints at a potential rebound. The 1.10 put/call ratio (based on open interest) isn’t screaming bearish—it’s just cautious. And with the stock trading near its 200D MA ($1,112), the technicals are whispering, "This could be a bottom."

The Options Playbook: Where Smart Money Is Betting

Let’s break down the OTM options. The puts at $1,100 and $1,000 (4,881 and 4,296 OI) are like a safety net for bears. But the calls at $1,300 and $1,400 (5,936 and 4,061 OI) tell a different story. Think about it: if you’re a long-term NFLX bull, you’re buying those calls to lock in a rebound. The next Friday chain amplifies this: $1,300 calls (840 OI) and $1,000 puts (1,408 OI) suggest a longer-term bet on volatility. No block trades to worry about—this is retail and institutional money hedging, not whales moving mountains.

The News Angle: Tax Drama vs. Real-World Resilience

The Brazilian tax hit is real, but Netflix’s guidance isn’t dire. Q4 revenue growth is still on track at 17%, and ad revenue is hitting records. The market’s overreaction? Maybe. The stock’s 14-day historical return post-earnings has averaged 6.8% in prior quarters. That’s not a fluke—it’s a pattern. Investors are conflating a one-time tax expense with long-term margin pressure, but the CFO’s on record saying this won’t "materially impact future results." If the market forgets that, the $1,100 puts could be a trap. But if sentiment shifts, those $1,300 calls might be the key to unlocking a rebound.

Actionable Trades: Protect the Downside, Bet on the Rebound

• Options Play 1: Buy $1,100 Puts (Friday Expiry)
• Why? The 4,881 OI at this strike shows heavy demand for downside protection. If NFLX breaks below $1,152.17 (lower Bollinger Band), these puts could gain 20%+ in value.
• Entry/Exit: Buy at $1,100 puts if NFLX closes below $1,140 tomorrow. Target a 15–20% move if the stock hits $1,050 by Friday.

• Options Play 2: Buy $1,300 Calls (Friday Expiry)
• Why? The 5,936 OI here suggests smart money is betting on a rebound. With RSI at 67.56 and the stock near its 200D MA, a bounce to $1,200 isn’t out of the question.
• Entry/Exit: Buy at $1,300 calls if NFLX holds above $1,152.17 (lower Bollinger Band). Target a 10–15% move if the stock breaks $1,250 by Friday.

• Stock Play: Buy Near $1,152.17 Support
• Why? The lower Bollinger Band and 200D MA ($1,112) form a strong support zone. If NFLX holds here, it could rally to retest the 30D support at $1,198.63.
• Entry/Exit: Buy NFLX at $1,152.17 with a stop-loss at $1,120. Target $1,200 as a short-term goal, $1,250 as a stretch.

Volatility on the Horizon: What to Watch Next

The next 72 hours will be critical. If NFLX holds above $1,152.17, the $1,300 calls and $1,200 stock target gain credibility. But if the stock breaks below $1,120, the $1,100 puts and 200D MA ($1,112) become key. The 30D support at $1,198.63 is a psychological level—don’t be surprised if we see a test there. In the long term, the 100D MA at $1,222.49 is a ceiling to watch. This isn’t a binary bet—it’s a dance between fear and fundamentals. And right now, the floor is set for either a rebound or a deeper correction.