CFRA expects the streaming giant to underperform the S&P 500 (SPX)
Streaming giant Netflix Inc (NASDAQ NFLX) is sinking this morning, last seen down 5.7% at $227.34, after CFRA downgraded the equity to “sell” from “hold." The firm expects Netflix to underperform the S&P 500 (SPX) for the remainder of the year, after adding roughly 40% from its mid-July lows.
Digging deeper, the security's latest rally fell short of the $260 level and 120-day moving average, the latter of which has acted as pressure for most of the year. The shares have struggled on the charts, down 62% so far in 2022, though a floor at the $220 level looks poised to contain today's bear gap.
Calls still outpace puts on an overall basis, but investors have been picking up long puts at a faster-than-usual pace over the last 10 weeks. This is per NFLX's 50-day put/call volume ratio of 0.82 back at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which sits higher than 90% of readings from the past year.
These traders are in luck, as now seems like the perfect opportunity to bet on the Netflix stock's next moves with options. This is per the equity's Schaeffer's Volatility Scorecard (SVS) ranking of 98 out of 100, which suggests NFLX has usually outperformed volatility expectations.