Trade idea
NFLX earnings anticipation
The speaker discusses a Netflix trade, indicating a long position in the stock. The trade was initiated based on the stock's performance around the earnings report, with the stock opening lower but rallying afterward. The speaker's strategy involves anticipating earnings and adjusting positions based on market reactions. The trade is considered a short-term opportunity, with the expectation of a price increase following the earnings report.
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Strategyearnings anticipation
Assetequity
Time horizonShort-term (within 1-3 trading days)
Entry / triggerEarnings report release
Target / exitPrice increase following earnings report
Invalidation / stopSignificant price decline or negative earnings report
SpeakerTony Battista
Risks- Earnings report may be negative or underperform expectations.
- Market volatility could lead to unexpected price movements.
- The stock may not perform as expected due to broader market conditions.
Trade idea
NFLX put ladder
The trade involves selling a put ladder on Netflix, which is expected to have a high probability of profit (83%) and a low implied volatility risk (IVR 94). The expected move of 540 points is projected to bring the stock down to the strike prices, making the trade profitable. The speaker notes that the stock has had a significant downtrend and that the downside risk is likely exhausted, making this a viable short-term trade.
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Strategyput ladder
Assetequity
ExpirationJuly 3-day and August
Time horizonEarnings report date
Entry / triggerNetflix earnings report
Target / exitProfit of $1.88
Invalidation / stopIf the stock moves above the strike prices
SpeakerTom Sosnoff
Structure / legs- July 3-day expiration 68 puts
- August 65 puts
Risks- The stock could open above the strike prices, leading to losses
- Market volatility could increase, affecting the trade's outcome
- The earnings report could have unexpected results, impacting the stock price
Trade idea
Netflix put ratio spread
This is a bullish strategy
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Strategyput ratio spread
Assetstock
ExpirationAugust
Time horizonnot specified
Entry / triggerstock is down 330
Target / exitcredit of 40 cents
Invalidation / stopstock could go to $10
SpeakerTom Sadov
Structure / legs- buy one August 105 put
- sell two August 95 puts
Risks- stock could go to $10
- adjust strikes down if needed
Trade idea
NFLX Put Spread
The speaker is short a put spread on Netflix, selling the August 70 put for $3.55, expecting the stock to remain below this strike. The strategy is based on the belief that Netflix is in a downtrend following earnings reports, and the put spread allows for profit from the premium while limiting risk. The speaker also mentions a call diagonal spread, indicating a broader strategy of using options to capitalize on market movements.
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StrategyPut Spread
AssetEquity
ExpirationAugust
Time horizonUntil expiration
Entry / triggerStock is trading below the short put strike
Target / exitProfit from the premium received
Invalidation / stopIf the stock rises above the short put strike
SpeakerTom
Structure / legs- Put at 70 strike
- Put at 75 strike
Risks- If the stock rises above the short put strike
- Market volatility could impact the trade
Trade idea
Netflix put selling
The speaker mentions that selling Netflix's 85 puts was one of their favorite trades, indicating a bullish outlook on Netflix. The trade was executed when Netflix was up 285 265, suggesting a potential for continued upward movement. The speaker's confidence in this trade implies a belief in the stock's positive momentum.
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Strategyput selling
Assetequity
Expirationnot specified
Time horizonnot specified
Entry / triggerNetflix up 285 265
Target / exitnot specified
Invalidation / stopnot specified
SpeakerSol
Risks- Market downturn could result in losses if the stock declines below the strike price
- Volatility could impact the value of the options
Trade idea
Netflix naked put
The speaker suggests that the naked put strategy on Netflix is preferable to a short put spread due to the potential for higher returns and the ability to manage risk through adjustments. The trade involves selling a naked put at the 75 strike with a credit of 188, aiming for a stock price increase to 76. The risk is limited to the difference between the strike price and the stock price if it drops below 73. The speaker emphasizes the importance of adjustments and the cost of spreads in decision-making.
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Strategynaked put
Assetstock
Expirationnot specified
Time horizonshort-term
Entry / triggerstock price at 75
Target / exitstock price at 76
Invalidation / stopstock price drops below 73
SpeakerBrad
Risks- Potential for unlimited downside if the stock price drops significantly
- Need for active management and adjustments
- Higher risk compared to spreads
Trade idea
NFLX Put selling
The speaker sold put options on Netflix (NFLX) with a strike price around 90, expecting the price to remain above that level. The rationale is based on the belief that the stock is overpriced and that the recent earnings report, while positive, may not justify the current price. The trade idea is to profit from a potential decline in the stock price, with the put options acting as a hedge against downward movement.
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StrategyPut selling
AssetEquity
ExpirationJune
Time horizonShort-term
Entry / triggerPrice above 93.5
Target / exitPrice below 90
Invalidation / stopPrice above 95
SpeakerSol
Risks- Market volatility
- Unexpected earnings report
- Liquidity issues
Trade idea
NFLX put selling
The speaker suggests that during earnings cycles with low volatility, selling puts on stocks like Netflix (NFLX) can be a profitable strategy. The implied moves are expected to be around 6-7%, and the puts are relatively cheap due to the low volatility environment. The speaker emphasizes that the key is to trade outside the expected move, as trading inside the expected move is less profitable. The risk is increased if there is a market shock, as the risk is not adequately priced into the options.
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Strategyput selling
Assetequity
Expirationunknown
Time horizonEarnings event
Entry / triggerEarnings cycle with low baseline volatility
Target / exitImplied move of 6-7%
Invalidation / stopMarket shock or significant move beyond expected range
SpeakerUnknown
Risks- Market shock
- Significant move beyond expected range
- Low volatility environment may not persist
Trade idea
NFLX short strangle
The speaker suggests adjusting a short strangle position to be outside or at the expected move to increase the statistical chance of success. They emphasize that if the position would not be opened today with the current information, it should be adjusted or covered. The strategy involves re-centering the strikes around the expected move, either by moving them outside or at the expected move, and skewing the position slightly for delta exposure.
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Strategyshort strangle
Assetequity
ExpirationMay
Time horizonshort-term (earnings season)
Entry / triggerbefore earnings announcement
Target / exittwo times the expected move
Invalidation / stopif the stock moves within the expected move range
Speakerunknown
Risks- Volatility spikes
- Unexpected earnings results
- Market gaps
Trade idea
NFLX sell puts
The speaker suggests selling puts on Netflix (NFLX) as a strategy for the earnings cycle, given the improved liquidity and market conditions. The rationale is that the probability of profit remains consistent, but the potential reward is higher in high volatility. The speaker also mentions adjusting position sizes based on volatility levels and avoiding vertical spreads due to the lack of liquidity in the past.
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Strategysell puts
Assetequity
Expirationearnings date
Time horizonshort-term
Entry / triggerif the stock is bullish
Target / exitprofit from the premium
Invalidation / stopif the stock moves below the put strike price
SpeakerScott
Risks- significant loss if the stock moves against the position
- limited liquidity in certain strike prices
Trade idea
NFLX credit spread
Netflix (NFLX) is a liquid stock with a history of significant price movements around earnings. Credit spreads can be used to collect premium before earnings, but the risk is that the price may move beyond the expected range, invalidating the trade. The strategy is suitable for a small account due to the limited capital required for the spread.
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Strategycredit spread
Assetequity
Expirationearnings date
Time horizonshort-term
Entry / triggerbefore earnings announcement
Target / exitpremium collected
Invalidation / stopsignificant price movement beyond expected range
SpeakerSteve
Risks- Significant price movement beyond expected range
- Volatility may affect the effectiveness of the spread
- Liquidity issues if the stock is not liquid
Trade idea
NFLX short strangle
The speaker proposes a short strangle in Netflix with a conservative strike range, based on the expected price movement of $6 outside the range on both sides. The strategy is described as low risk and low reward, suitable for traders looking to participate in potential price movements without significant exposure. The speaker emphasizes the importance of the IVR and the probability of success, suggesting that the trade is appropriate for those seeking to enter a strangle in Netflix with a low risk profile.
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Strategyshort strangle
Assetequity
ExpirationJune
Time horizonShort-term
Entry / triggerStock price within a narrow range
Target / exit75% probability of success (P50)
Invalidation / stopSignificant price movement beyond expected range
SpeakerSpeaker
Structure / legs- short put at 82.98
- short call at 88.78
Risks- Limited reward potential
- Risk of significant price movement beyond expected range
Trade idea
NFLX Put Selling
The speaker suggests selling puts on Netflix (NFLX) at a strike price of 455-465, expecting the stock to trade above the strike price. The rationale is that Netflix has underperformed compared to other stocks, and the speaker believes the stock may not move significantly. The trade is considered a short-term play, with the expectation that the stock will not drop below the strike price. The risk is that the stock could fall below the strike price, resulting in a loss.
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StrategyPut Selling
AssetEquity
ExpirationNot specified
Time horizonShort-term
Entry / triggerStock price at 86
Target / exitStock price above 455
Invalidation / stopStock price below 455
SpeakerLoki
Structure / legs- Put with strike price 455
- Put with strike price 465
Risks- Stock price could fall below the strike price
- Market volatility could impact the trade
Trade idea
NFLX Wheel Trading
The speaker suggests using wheel trading on Netflix (NFLX) by selling puts at 77.50 and then selling calls against the stock. This strategy is based on the belief that Netflix is at a multi-year low and could be a good candidate for such a trade. The reasoning is that the stock is undervalued and has potential for upward movement, making it a suitable candidate for a bull call spread. The speaker also mentions that the stock is on a multi-year low, which supports the idea of a long-term bullish outlook.
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StrategyWheel Trading
AssetEquity
ExpirationNot specified
Time horizonNot specified
Entry / triggerStock price at 77.50
Target / exitNot specified
Invalidation / stopNot specified
SpeakerUnknown
Risks- Market volatility
- Failure to meet the strike price
- Liquidity issues
Q&A
Did you trade any Russell?
The speaker did not trade any Russell. They mentioned trading NASDAQ and S&Ps, being long gold, short silver, and short micron. They also mentioned buying Netflix premarket and selling it out.
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Actionable takeawayThe speaker's trading activity includes specific indices and commodities, with a focus on short positions in certain assets.
Q&A
Do you still have a Netflix subscription?
Yes, the speaker does have a Netflix subscription.
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Actionable takeawayThe speaker has a Netflix subscription.
Q&A
What is the recommended trade for Netflix (NFLX)?
The speaker recommends selling the 75 puts on Netflix (NFLX) for 107, with the expectation that the stock price will remain within a certain range. The trade is considered a short-term opportunity given the stock's volatility and recent price movements.
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Actionable takeawaySell the 75 puts on Netflix (NFLX) for 107, with the expectation of profit from volatility and price range.
Q&A
What was the price movement of Robinhood and Netflix?
Robinhood was up 289.76, and Netflix was up 375, indicating significant price increases for both stocks.
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Actionable takeawayBoth stocks experienced notable upward movements, suggesting positive market sentiment or specific catalysts affecting their performance.
Q&A
What is your favorite stock trade?
The speaker's favorite stock trade is Netflix, as they have recently executed a similar trade and believe in the stock's potential for a short put spread.
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Actionable takeawayThe speaker favors short put spreads on Netflix, based on their belief in the stock's downtrend and the potential for profit from the premium.
Q&A
Should I reverse my direction in Netflix?
The speaker advises against reversing the direction in Netflix, suggesting that the stock is overpriced and that the recent earnings report may not justify the current price. The speaker also mentions that the market is bullish, and it's better to wait for a more favorable entry point.
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Actionable takeawayAvoid reversing direction in Netflix unless there is a clear reason to believe the stock is overpriced and the market is bearish.
Q&A
Does purchasing a debit call spread have a negative probability of profit?
The probability of profit in a debit call spread depends on the strike prices chosen. In-the-money call spreads have a higher probability of profit, while out-of-the-money call spreads have a lower probability. The speaker explains that buying an in-the-money call spread, such as Netflix's 106s and 109s, provides a statistically high probability of profit, whereas an out-of-the-money spread would result in a negative probability of profit.
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Actionable takeawayThe probability of profit in a debit call spread is influenced by the strike prices selected. In-the-money spreads generally offer a higher probability of profit, while out-of-the-money spreads may have a lower probability.
Q&A
What is the current price of Netflix?
The current price of Netflix is 82, down from 107 before the last earnings report, representing a 30% drop.
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Actionable takeawayNetflix has experienced a significant price drop, which may indicate a potential opportunity for shorting.
Q&A
What do you guys think with a small account? It's only about $10,000. Would you do Netflix credit spread into earnings?
A small account with $10,000 could consider a Netflix credit spread into earnings. The strategy involves buying a credit spread, which allows for collecting premium. The risk is that the price may move beyond the expected range, invalidating the trade. The speaker suggests that the trade could tie up around $7,000, depending on the strike prices chosen.
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Actionable takeawayA small account can consider a credit spread strategy for Netflix before earnings, but the risk of significant price movement should be carefully managed.
Q&A
Have you found Netflix to be better or worse since the split to trade?
The speaker states that Netflix was untradable before the split, but now it is a decent trading vehicle due to increased liquidity and narrower bid-ask spreads. The applicable conditions include a market environment with increased liquidity and narrower spreads, and the practical implication is that it allows for more efficient trading.
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Actionable takeawayNetflix is now a more tradable asset due to increased liquidity and narrower spreads.
Q&A
Do you have anything in Nvidia waiting?
The speaker does not have a position in Nvidia but has a position in MU, which is considered fine. The speaker is also long Netflix and short some puts on various strike prices.
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Actionable takeawayThe speaker is managing multiple positions across different assets, including long and short positions in equities and options.