Netflix (NASDAQ: NFLX) is trading around $68.89, down roughly 45% from its 52-week high, creating an unusual income opportunity for investors willing to be patient.
One strategy gaining attention involves selling a cash-secured put option on NFLX expiring June 17, 2027, with a strike price of $48 per share.
Each contract covers 100 shares and collects roughly $194 in premium, working out to approximately 4.5% annualized on the $4,800 of capital set aside to secure the trade.
Parking that reserve cash in a money market or savings account earning around 5.0% pushes the combined annualized yield to approximately 9.5%.
If NFLX never falls to $48 before expiration, the put expires worthless and the investor simply keeps the full $194 premium, free to deploy the same strategy again.
If the stock does close below $48, the investor is assigned 100 shares at that price, but the premium already collected reduces the effective cost basis to roughly $46.06 per share, a discount of about 33% to today’s price.
The trade’s logic rests heavily on one’s conviction in holding Netflix as a long-term business, making the fundamental picture central to any decision.
Management has argued the company has captured just 7% of a $670 billion addressable revenue market, reaching fewer than 45% of what it considers its addressable households, describing the business as “just getting started.”
The company’s stated goal is to “sustain healthy revenue and profit growth,” with management targeting 14% top-line growth for the full year, a number analysts will watch closely as a measure of whether the growth narrative remains intact.
Bears, however, point to guidance suggesting revenue growth is slowing in the third quarter, alongside concerns that “reported viewing hours per member have softened” as the platform matures.
Management has countered by referencing internal quality metrics it says are improving, but declines to share the underlying data, citing them as a “competitive advantage,” a position that asks investors to trust an undisclosed scorecard.
Skeptics also question whether accelerating content spending, including new ventures into live events, will translate into the subscriber and revenue growth it once reliably produced.
For income-focused investors, the put strategy’s appeal is that cash is collected upfront regardless of how that debate resolves, providing a buffer against further downside.
The single most important variable to monitor is revenue growth, as management’s ability to hit its 14% full-year target will signal whether the platform’s expansion story has further room to run or is beginning to plateau.
