Netflix, Inc. (NFLX) Traders Eye Short-Term Downside

Netflix, Inc. (NFLX) is about to go toe-to-toe with Apple Inc. (AAPL)

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Published on Mar 17, 2015 at 10:43 AM
Updated on Apr 20, 2015 at 5:32 PM

Netflix, Inc. (NASDAQ:NFLX) puts have been popular in recent weeks, per data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). Specifically, the stock's 10-day put/call volume ratio across these exchanges checks in at 1.15 -- just 8 percentage points from a 52-week peak.

NFLX puts are again in high demand this morning, crossing at a 53% mark-up to typical intraday levels. The equity's most active put is the March 420 strike, which appears to be seeing some buy-to-open activity -- as speculators wager on the shares to breach $420 by Friday's close, when front-month options expire.

This level is significant, as it roughly corresponds with NFLX's 200-day moving average -- a trendline the stock toppled during a post-earnings upside gap on Jan. 21. Additionally, while NFLX ended that session south of $420, it hasn't done so since.

This morning, the security is up fractionally at $422.48, refusing to buckle under broad-market headwinds or looming competition from Apple Inc. (NASDAQ:AAPL). Longer term, Netflix, Inc. (NASDAQ:NFLX) has advanced nearly 24% on a year-to-date basis.

Daily Chart of NFLX since January 2015 With 200-Day Moving Average


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