Netflix Stock Moves Higher Ahead of Q3 Earnings

The FAANG stock is up nearly 90% year-over-year

Assistant Editor
Oct 20, 2020 at 2:25 PM
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The shares of Netflix Inc (NASDAQ: NFLX) are up 0.2% to trade at $531.71 this afternoon, just a few hours ahead of the security's third-quarter earnings report, which is due out after the close today. Below, we will take a look at how the equity has performed on the charts as of late, and explore some of the options activity surrounding NFLX ahead of the event. 

When we last checked in on the security, NFLX had just drawn a mix of bull and bear notes. Three months later, the equity has tacked on 8.6%, with support coming from its 80-day moving average. Just a week ago, shares made an attempt to reclaim the stock's July 13 all-time-high of $575.37, but ultimately fell short at the $572 level. And though NFLX has recently pulled back below the $530 level, the security still boasts a year-over-year lead of 91.7%.

NFLX Chart October 20

Calls are popular in the options pits, per NFLX's 50-day call/put volume ratio of 2.15 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio ranks in the highest percentile of the stock's annual range, suggesting there is a healthier-than-usual appetite for long calls of late. 

A look at the equity's history of post-earnings reactions during the past two years shows a generally dismal response. During its last eight reports, six next-day sessions were lower, including a 10.3% slip in July 2019. The security averaged a post-earnings swing of 4.5% the last eight quarters, regardless of direction. This time around, the options market is pricing in a much higher move of 12.2%. 

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