Magnificent Seven stock Netflix Inc (NASDAQ:NFLX) is down 9.8% to trade at $1,120.59 this morning, after the company posted adjusted third-quarter earnings of $5.87 per share on $11.5 billion in revenue, the former of which missed estimates. The main catalyst behind the miss was an unexpected tax dispute with Brazil.
The shares are headed for their worst single-session drop since April 2022 and earlier slid to their lowest level since May. The selloff takes NFLX's year-to-date gain down to 28%, though the 200-day moving average could be moving in as support.
Puts have been much more popular than usual over the last 10 weeks, per the stock's 50-day put/call volume ratio at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which ranks higher than 90% of readings from the past year. Echoing this, the equity's Schaeffer's put/call open interest ratio (SOIR) of 1.05 stands in the 5th percentile of annual readings.
Unsurprisingly, options are a hot commodity following the report. So far 100,000 calls and 87,000 puts have crossed the tape, seven times the average daily rate. Most popular is the weekly 10/24 1,100-strike put and the 1,200-strike call in the same series, with positions being sold to open at both.
