Options Traders Blast Netflix Stock After Post-Earnings Pullback

Options volume is running at 14 times the intraday average

Digital Content Manager
Jan 21, 2022 at 10:25 AM
facebook twitter linkedin

Netflix Inc (NASDAQ:NFLX) is in the hot seat this morning, despite posting better-than-expected fourth-quarter earnings and revenue. What's hurting the company instead is smaller-than-expected quarterly subscriber growth, fueling fears that the years of major growth for streaming services are coming to an end. At last check, the security is down 23.3% to trade at $389.60, sparking yet another tech selloff.

This update is not sitting well with the brokerage bunch, which is chiming in with a slew of bear notes. The equity received at least five downgrades, including one to "hold" from "buy" at Truist Securities, and no fewer than 15 price-target cuts, with MoffettNathanson lowering its price objective to $375 from $460. 

This marks a sharp shift in sentiment. Coming into today, 21 of the 27 analysts covering NFLX called it a "buy" or better rating, while only six said "hold" or worse. Plus, the 12-month consensus target price of $568.13 is a 46.7% premium to the security's current levels. 

Today's massive bear gap has Netflix stock trading at its lowest level since April 2020. Shares have been chopping lower since surging to a Nov. 17, all-time high of $700.98, and earlier this month lost long-time support from the 320-day moving average. Year-over-year, NFLX has shed 32.1%.

Options traders are also blasting the security today. So far, 72,000 calls and 88,000 puts have been exchanged, or 14 times what's typically seen at this point. Most popular is the January 400 put, followed by the 400 call in the same monthly series, with new positions being opened at the latter.


Special Offers from Schaeffer's Trading Partners