Key Takeaways
Netflix is scheduled to report quarterly results after the market closes. Options pricing implies an expected post-earnings move of approximately ±8%. Recent block trades point to divergent institutional positioning: sizeable purchases of both near-term and longer-dated $80 calls suggest expectations for further upside, while a large $70 put purchase appears to serve as downside protection.
Separately, traders sold short-dated $82 calls to harvest elevated option premiums. Overall sentiment remains constructive, although demand for downside hedging is also pronounced.
Earnings Preview
Earnings release: After market close
Last price: $73.53
Wall Street broadly expects another quarter of solid growth. Consensus estimates call for earnings per share (EPS) of $0.788, up 11.4% year over year, on revenue of $12.59 billion, representing 13.75% annual growth.
Source: Tiger Trade App
Key Options Indicators
Implied Volatility Signals an Elevated Event Premium
Ahead of earnings, implied volatility (IV) has surged sharply, particularly in contracts nearing expiration. Front-week options are pricing IV at 153.95%, among the highest levels on record.
Based on current option pricing, the market is implying a 68% probability that Netflix shares will move approximately ±8.05% following the earnings release.
That translates into an implied trading range of roughly $67.75 to $79.61.
Put/Call Ratio Points to Bullish Positioning
The overall put/call ratio stands at 0.34, well below 1, indicating that call activity continues to outpace put trading and suggesting broadly bullish positioning ahead of the earnings announcement.
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Block Trades Reveal Diverging Institutional Views
Recent large options trades highlight a mix of bullish positioning and defensive hedging.
Upside Bets Center on the $80 Strike
NFLX Jul. 24, 2026 $80 Call: 5,745 contracts bought, with premium totaling $844,500, indicating expectations that the stock could rally above $80 within a week of earnings.
NFLX Aug. 21, 2026 $80 Call: 2,800 contracts bought, representing $722,400 in premium, suggesting investors are extending the time horizon for a bullish move.
Large Protective Put Purchase
NFLX Jul. 24, 2026 $70 Put: 5,100 contracts bought, for approximately $759,900 in premium.
With Netflix trading near $73.50, the purchase of out-of-the-money $70 puts represents a meaningful hedging cost. Rather than an outright bearish wager, the trade appears designed to insure existing long exposure against a sharp post-earnings decline.
Short Call Sale to Capture Elevated Premium
NFLX Jul. 17, 2026 $82 Call: 3,000 contracts sold, generating approximately $225,000 in premium.
Selling near-dated out-of-the-money calls while implied volatility is elevated allows traders to monetize accelerated time decay. The positioning also suggests expectations that Netflix is unlikely to stage an immediate rally above $82 following earnings.
Market View and Strategy Considerations
The options market broadly agrees on one point: volatility is expected to be high, with an implied move of roughly 8%.
The disagreement lies in direction. Bullish investors are concentrated around the $80 strike, while more defensive participants are expressing caution through protective put purchases and covered call-type positioning. The presence of sizable hedging flows suggests that, despite constructive sentiment, investors continue to price meaningful downside tail risk.
For investors seeking to trade the earnings event, elevated implied volatility makes outright option purchases relatively expensive.
Bullish strategy: Investors with a strong positive view may consider a bull call spread, such as buying the $80 call while simultaneously selling a higher-strike call (for example, the $85 call), reducing premium outlay while defining maximum risk and reward.
Volatility strategy: Traders expecting realized volatility to come in below implied levels may consider a short strangle, although the strategy carries substantial risk if the stock moves sharply and requires disciplined margin management.
Hedging strategy: Shareholders may consider purchasing out-of-the-money protective puts, such as the $70 strike, or implementing a collar strategy by combining a covered call with a long put to limit downside exposure.
Risks
Implied volatility typically contracts rapidly after earnings, a phenomenon commonly referred to as IV crush, which can significantly reduce the value of long option positions even if the stock moves in the anticipated direction. In addition, time decay accelerates as options approach expiration. Investors should carefully assess the risk profile of any options strategy before establishing positions.
Disclaimer: This analysis is based on publicly available market data and is provided for informational purposes only. It does not constitute investment advice. Options trading involves substantial risk, and investors may lose more than their initial investment.
