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Netflix Options Market Prices in 7.3% Swing on July 16 Earnings
Summary
Options traders are anticipating a 7.3% move in Netflix shares following its upcoming earnings report, though the stock has underperformed this expectation in recent quarters.
The options market is pricing in a potential 7.3% move in either direction for Netflix Inc. (NASDAQ:NFLX) shares following the company's earnings announcement scheduled for after the market close on July 16. This expectation is derived from options data compiled by Bloomberg.
Historical Post-Earnings Moves
The options-implied move, a measure of expected volatility, has not always been a precise indicator of the stock's actual performance. According to the data, Netflix shares have exceeded the move predicted by options traders in just two of its last eight earnings announcements.
In the company's most recent reports, the actual price swings were more muted than anticipated:
- On April 16, shares declined 2.1%, significantly less than the 6.1% implied move.
- On January 20, the stock fell 4.5% compared to an expected move of 7.7%.
AdPast Volatility
Conversely, there have been instances of greater volatility. On October 21, the stock fell 8.4%, surpassing the 7.1% move priced in by the options market. The largest post-earnings price swing for Netflix in the past two years occurred on January 21, when shares surged 13.5% against an implied move of 8.3%.
For investors, the options-implied move serves as a gauge of market sentiment and anticipated risk around a key event like an earnings release. While it provides a benchmark for potential price action, historical data for Netflix shows that the actual outcome can vary widely from these expectations.