Netflix woes setting up for a Hollywood ending, says trader Mike Khouw

📰 source: cnbc_topnews · 📊 technical

netflix is trading at 18.9x forward earnings, down near its 2022 bear-market trough of under 15x. the business has gotten better: ad revenue is expected at ~$3 billion this year, with a path to $10 billion by 2030. the company is buying back stock and using ai to cut production and localization costs. trader mike khouw suggests selling a covered strangle: sell the august 65 put and 78 call, buy the 88 call, for a net credit of $1.10 — about 1.5% yield over 25 days. the profitable range is $63.90 to $79.10, and if assigned below $65, your entry is near 2022 lows. the trade makes more sense than buying shares outright.

why it matters: netflix's valuation nears historic lows while ad growth and margins improve, creating an options opportunity with high annualized returns.

source: cnbc_topnews
sentiment: +0.30 · impact: 0.50