$NFLX Options Intelligence

🎯 BUY NFLX JAN 16 2026 114/116 CALL SPREAD

I recommend a bull call spread on NFLX because the term structure shows that the 30-day Clean IV (~48.7%) is below the 90-day baseline volatility (35.4%), indicating options are relatively underpriced for longer-term expirations after stripping out near-term event premiums. NFLX is currently trading at $99.28, down 3.81% today due to lowered subscriber growth guidance and analyst downgrades, which may present a buying opportunity for a moderate rebound into earnings on January 20, 2026. The 114/116 call spread balances risk and reward with manageable cost and aligns with technical resistance levels near $113-$114 (50-day and 200-day moving averages).

Buy NFLX Jan 16 2026 114/116 Call Spread
Stock Price: $99.28 | Entry: Approximately $1.35 debit (based on typical mid prices between bid/ask)

📊 Trade Metrics

• Risk: $135 per spread (max loss)
• Max Reward: $65 per spread (difference between strikes $2 minus debit $1.35)
• Breakeven: $115.35 at expiration
• Days to Expiration: 42
• Win Rate: Moderate (delta of long call ~0.19, short call ~0.16, net delta ~0.03)

📈 Term Structure & Volatility Analysis

• Baseline 90-day Volatility: 35.4%
• 30-day Clean IV: ~48.7% (below baseline, indicating relatively cheap premium)
• Market IV: 51.7% (current) vs Historical IV 67.4% (low IV rank 0%)
• Earnings Multiplier: 1.69x (moderate expected earnings move)
• Calendar Opportunity: Yes, significant IV drop in longer expirations suggests buying longer-term premium
• Recommendation: Buy longer-dated call spreads to capture potential recovery after recent selloff and ahead of earnings

📈 Greeks & Volatility

• Net Delta: Slightly bullish (~0.03)
• Theta: Slightly negative (~-0.05 per day) but manageable with 42 days out
• Vega: Positive (benefits from any IV increase)
• Current IV Rank: 0% (favors buying premium)
• Put/Call Volume Ratio: 0.28 (very bullish sentiment)

🎯 Why This Trade

The term structure reveals that longer-dated options are underpriced relative to historical volatility, creating a buying opportunity. NFLX’s recent 3.81% drop is driven by lowered subscriber growth guidance, analyst downgrades, and insider selling, which may have overly punished the stock in the short term. The 114/116 call spread offers a defined-risk bullish position that benefits from a moderate rebound toward the key technical resistance zone near $113-$114 (50-day and 200-day MAs). The spread expires after earnings on January 20, 2026, allowing you to capture any positive reaction to the report. The low IV rank and moderate earnings volatility multiplier support buying premium rather than selling.

📊 Pro Analysis

• Current IV: 51.7% vs Historical: 67.4% (cheap premium)
• IV Rank: 0% (favors buying premium)
• Expected Daily Move: ±$3.23 (3.26%) — the spread breakeven at $115.35 requires a ~16% rise, reasonable over 42 days if fundamentals improve
• Put/Call Ratio: 0.28 (strong call buying)
• Market Maker Max Pain: $116 (close to short call strike)
• Technical: RSI near 33 (neutral/borderline oversold), price below all major MAs indicating potential for mean reversion
• Unusual Activity: Elevated put volume on near-term strikes suggests short-term bearishness, making longer-term bullish spreads attractive

🔍 Earnings Date Check

• Earnings on January 20, 2026
• Recommended expiration January 16, 2026, is just before earnings but close enough to benefit from any pre-earnings run-up or early reaction
• This timing avoids the highest IV spike on earnings day but captures the build-up

💡 Trade Management

• Entry: Place limit order near $1.35 debit (approximate midpoint of bid/ask)
• Target: Close at $2.00+ (50%+ profit)
• Stop: Exit if NFLX falls below $95 to limit downside
• Time Stop: Close 2-3 days before expiration to avoid rapid time decay

🔒 Pricing Validation

• 114 Call intrinsic value: max(0, 99.28 - 114) = $0 (OTM)
• 116 Call intrinsic value: $0 (OTM)
• Spread intrinsic value: $0
• Debit spread cost $1.35 > intrinsic value $0 ✅
• Put-call parity holds for these strikes and expiration based on market data ✅

🔍 Market Overview

The market is in a cautious phase with Fed rate decision and CPI data upcoming on December 10, which may increase volatility. NFLX’s fundamentals show solid profit margins (22.1%) and strong net income but face near-term headwinds from subscriber guidance. The streaming sector peers like DIS, AMZN, and GOOGL are mixed, reflecting competitive pressures. Technicals show NFLX is oversold but below key moving averages. The current IV rank at 0% and low historical volatility support buying premium strategies now rather than selling. The Max Pain at $116 aligns well with the short call strike, suggesting option market makers expect a rebound toward that level.

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This trade balances defined risk with upside potential, leverages favorable term structure, and aligns with both technical and fundamental context for NFLX at $99.28. Confidence is moderate-to-high given the low IV rank, technical oversold signals, and upcoming earnings catalyst. Risk is limited to the debit paid, with breakeven at $115.35, about 16% above current price, plausible over 6 weeks if subscriber growth concerns ease.