NFLX Options Signal $1,230–$1,165 Imbalance: Short-Term Bullish Breakout or Bearish Reversal?

• NFLX trades at $1,211.41, with a 0.26% intraday gain but remains below its 30D moving average of $1,222.47.
• Put/call open interest ratio of 1.27 highlights bearish sentiment, with heavy put OI at $1,165 (2,246 contracts) and call OI at $1,230 (1,542 contracts for this Friday).
• Loop Capital upgrades NFLX to 'Buy' with a $1,350 target, while Zacks downgrades to 'Hold' amid valuation concerns and insider selling by Reed Hastings.

The options market and technicals present a mixed but actionable setup: NFLX faces short-term bearish momentum (RSI at 41.36, MACD -1.81) but shows long-term range-bound potential. The $1,230 call and $1,165 put strikes dominate open interest, suggesting a critical inflection point near these levels. Traders must weigh the bearish put/call imbalance against bullish catalysts like Loop Capital’s upgrade and strategic partnerships.

Subheading: OTM Options Imbalance and Market Sentiment: A Battle for $1,230–$1,165

The options chain reveals a stark divide in market positioning. For this Friday’s expiration, $1,230 calls (1,542 OI) and $1,165 puts (2,246 OI) dominate, reflecting a tug-of-war between bulls targeting a 1.5% rally and bears hedging a 6.7% drop. The put/call ratio of 1.27 (put OI: 311,967 vs. call OI: 245,416) underscores bearish bias, with investors preparing for a potential pullback to the 200D support at $1,086.06. However, the $1,230 call strike aligns with the 30D support/resistance zone (1,243.80–1,245.30), suggesting a possible short-term breakout if NFLX closes above this level. The absence of block trades means retail and institutional options activity will likely dictate near-term direction.

Subheading: News-Driven Narrative: Strategic Partnerships vs. Valuation Concerns

Recent news creates a dual narrative for NFLX. On the bullish side, AB InBev and Domino’s partnerships aim to boost engagement and diversify revenue, while Loop Capital’s $1,350 target highlights confidence in Netflix’s content pipeline. However, Zacks’ downgrade and Reed Hastings’ $31.4M insider sale signal caution. The RSI at 41.36 (oversold territory) and MACD histogram at -1.97 suggest a potential rebound, but the Bollinger Bands (upper: $1,263.97, lower: $1,181.33) indicate a 12% range between key levels. Investors must assess whether the $1,230 call strike (1.5% above current price) can overcome bearish technicals or if the $1,165 put (5.1% downside) will dominate as a hedge against a broader market selloff.

Subheading: Actionable Trade Ideas: Calls for Breakouts, Puts for Hedging

For options traders, the $1,230 call (this Friday) and $1,165 put (this Friday) offer high-impact setups:

• Bullish Play: Buy the $1,230 call if NFLX closes above $1,222.65 (middle Bollinger Band). Target a 3–5% move to $1,250–$1,270, aligning with the 30D resistance and upper Bollinger Band.
• Bearish Hedge: Buy the $1,165 put if NFLX dips below $1,181.33 (lower Bollinger Band). Target a 6–8% drop to $1,135–$1,125, where next Friday’s $1,135 put (1,642 OI) could amplify risk.

For stock traders, consider:

• Long Entry: $1,200–$1,205 if NFLX holds above the 200D MA ($1,086.06). Target a 6–8% move to $1,260–$1,280, with a stop-loss at $1,181.33.
• Short Entry: $1,245–$1,250 if NFLX breaks below the 30D MA. Target a 5–7% drop to $1,180–$1,165, with a stop-loss at $1,263.97.

Subheading: Volatility on the Horizon: Earnings and Strategic Catalysts

The Q2 2025 earnings report on July 17 and Greg Peters’ Goldman Sachs presentation on September 8 could act as catalysts. If NFLX reports strong subscriber growth and content pipeline updates, the $1,230–$1,250 call strikes (next Friday’s $1,260 call has 914 OI) may gain traction. Conversely, a miss on guidance or renewed competition from Disney could validate the $1,165–$1,135 put strikes. Traders should monitor the 30D support/resistance zone (1,243.80–1,245.30) as a critical pivot point. The RSI’s oversold reading and MACD’s bearish crossover suggest a potential rebound, but the put/call imbalance warns of lingering bearish sentiment. Positioning near $1,210–$1,215 offers a balanced approach, with options providing directional leverage and the stock offering exposure to long-term range-bound trends.