Netflix (NFLX) - Bearish Earnings Options Action Trade

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On Friday's Options Action, the crew analyzed the performance of Netflix (NFLX) stock. NFLX has recently broken out to the upside of a 10 year ascending wedge formation, which is extremely bullish. That bullish trend has however turned parabolic, which suggests that there are greater risks to the downside and primed for a possible correction. Coupled with a double top formation and earnings this week, the stock would need a signifcant beat to continue it's bullish trend. Expecting NFLX to possibly pull back on earnings, Michael Khouw suggests buying an Aug 350/370/395 Put Butterfly for a $5.00 Debit. As of Friday's close, this spread is trading at $5.00.

We've structured this trade in OptionsPlay so you can analyze and view this trade along with the supporting technical chart at your convenience.

View this OptionsPlay on AXP - app.optionsplay.com/

Cost: $500
Max Reward: $2,000
Max Risk: $500
POP: 26.45%
B/E: $350.00, $390.00,
Days to Expiry: 33

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أغلقت الصفقة: تم الوصول للهدف

Look to take profits on this in the morning!!