Netflix's 3Q earnings were pretty bad, yet the stock rallied. This rally is likely due to upside overall market risk, not because Netflix is a good stock. During that same period (mid-Oct to Dec 2022), S&P 500 rallied 375 (10%). We have seen this repeatedly in other stocks like Apple and Meta. Stocks rallying on bad earnings is an excellent opportunity for shorting. Netflix's upcoming earning is on 19 Jan 2023 post-market.
You may want to stay out of this trade if you already hold multiple shorts positions. Do not overexpose yourself, especially with NFP and CPI data before Netflix's earning.
There are two ways to play this.
1) Short the stock as per the level provided
2) A Bear Put Spread.
Buy Put Option Expiry 20 Jan 2023 Strike 285 Write Put Option Expiry 20 Jan 2023 Strike 240
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