NFLX Options Signal $120 Bullish Battle: How Traders Can Hedge or Capitalize on Earnings Volatility

• Netflix (NFLX) trades at $95.29, up 1.37% today, with RSI at 21.85—its most oversold level in months.
• Options market shows heavy call open interest at $120 and $130 strikes, while puts pile up at $95 as a key short-term floor.
• Morgan Stanley’s $120 price target and a $72B Time Warner acquisition headline a stock at a potential inflection point.

Here’s the core insight: Options data and technicals are painting a high-stakes scenario. The stock is testing critical support/resistance zones while options players are loading up on both bullish and bearish bets. The question isn’t whether NFLX will move—it’s which way and how fast. Let’s break it down.

The $120 Call Wall and $95 Put Floor: A Battle for Earnings Season

The options chain tells a story of divided conviction. For Friday’s expiration, calls at $120 (OI: 51,890) and puts at $95 (OI: 26,357) dominate, with next-week’s volume shifting slightly lower strikes like $100 and $95. This isn’t just noise—it’s a setup.

Think of it like a football game: Bulls are stacking defenders (calls) at $120, betting on a rebound toward Morgan Stanley’s $120 target. Bears aren’t backing down, though—the $95 puts act as a safety net for those fearing a breakdown below key Bollinger Band support ($88.85). The near-even put/call ratio (0.97) suggests neither side has a clear edge… yet.

Block trades? None. That’s telling. No major institutional players are moving mountains here—yet retail and options marketeers are calling the shots. For now, the action is in the crowd, not the whales.Acquisition Drama and Analyst Optimism: Fuel for the Fire

The $72B Time Warner deal is a double-edged sword. On one hand, it adds debt and ties up capital—classic short-term headwinds. On the other, it gives Netflix a content library that could redefine its competitive edge. Analysts like Morgan Stanley’s Benjamin Swinburne aren’t sweating the debt—they’re betting on the long game.

But here’s the rub: The market isn’t pricing in certainty. The stock’s 1.37% rally today comes after a brutal year-to-date drop. That means investor sentiment is fragile. A positive earnings report in January could flip the script, but a miss? The $95 puts might get a rush of buyers.

Actionable Trades: Calls for the Bold, Puts for the Pragmatic

For the bullish: Buy NFLX20251226C120 (next Friday’s $120 call). Why? High open interest means liquidity, and the $120 level aligns with Morgan Stanley’s target. If NFLX breaks above its intraday high of $95.54, this call could catch fire. Entry: $1.20–$1.50 per contract. Target: $2.50 if the stock hits $120.

For the bearish: Buy NFLX20251219P95 (this Friday’s $95 put). The strike sits just below today’s open ($93.57) and acts as a psychological floor. If the stock gaps down or stalls below $94, these puts could offer a hedge. Entry: $1.80–$2.20. Target: $3.50 if NFLX drops to $90.

Stock players: Consider entry near $93.45 (today’s low) if the 30D support at $92.71 holds. A break above $97.50 (midpoint of 30D resistance) would validate the short-term bullish case. Stop-loss below $92.71 could protect against a breakdown.

Volatility on the Horizon: Prepare for a Show

The next two weeks will test NFLX’s resolve. The options market is pricing in a 15–20% move either way, and the Time Warner deal adds narrative fuel. While technicals remain bearish in the short term (RSI 21.85, bearish MACD), the fundamentals are screaming for a re-rating.

Traders need to pick their battles: Go long with the $120 calls if you trust the analysts’ vision. Or play it safe with the $95 puts to hedge against a earnings-driven selloff. Either way, this is one stock that won’t let you sleep. The only question is—are you ready to wake up?