Schwab Network on $NFLX (Oct 28, 2026)

Well, speaking of a name that has already announced its earnings, namely Netflix, whose performance has been a bit disappointing . I mean, it wasn't a huge sale compared to some of the performance we've seen from Netflix over the past few years, but we're still much closer.

I mean , we're actually at our lowest point in 52 weeks now, so what are you watching for Netflix?

Yes, you know? My first deal will actually be an optimistic buy. Now, before Ben attacks me for this, look, I am definitely pessimistic about the stock in the long term. It's not like that , it's a terrible graph.

I'm not thrilled that Netflix turned around and hired, you know, a content manager from Disney.

It's brutal , but at the same time, there has been a tremendous amount of call options activity. I think we are currently in oversold territory , and I am just looking for that typical bounce-off.

For those who don't speak the language of traders, this means that meteoric rise we often talk about. It's just that kind of huge, sudden rise. Again , there is activity in buy contracts over the past two days that supports this.

There are many traders who buy some buy contracts outside the current price range (Out of the money). So, what I'm doing here is simply a short-term trade in pursuit of that bounce.

This deal will have an expiry date of November 20th. We'll just reach November 20th, right ? A little less than a month . I will buy call options at a price of 63. I will sell call options at a price of 66 in return .

This transaction was carried out at a discounted cost of 90 cents. The risk-to- reward ratio is reasonable, but we need a move above the 66 area, which is very likely. Again, we are in a very oversold area , but before you attack me, it's just a deal.

It's just a short-term deal. In the long run, I understand it. I understand that.

do you see evidence that this level of oversold condition may actually begin to provide support for a tangible rebound, or may we see a continuation of the slide down that we have unfortunately been experiencing for so long?

Yes, as you know, I am not at all opposed to the idea that Don is putting forward here. I mean , I think the fact that there was downward pressure was very excessive, and you saw the Relative Strength Index (RSI ) in this oversold condition on a few different occasions, and the stock was responding to that.

But I think you should ask a bigger question in the long run . This is the question that Netflix always asks others: Are you still watching? And I think this has the potential to shake off some of these pessimists, because we have seen these strong and sudden spikes on a few different occasions.

We saw it earlier in the year, and we saw it after the latest earnings announcement at the same support level that we just broke two days ago at around the 65 mark . So, if a bounce occurs and the stock starts to rise above that level for any reason, whether it's due to some excitement about the changes Netflix is making to its content side .

However, you have the Relative Strength Index (RSI) which is registering almost the same low it tested a little while ago. I'll call it that , and here I'll support "Don" in this matter.

I would call that a hidden bullish divergence because you got lower lows, but you got an even bottom in the RSI. I think this suggests there is a little consolidation at that low level, perhaps for a possible directional move at a lower cost.

Here's the thing: we publish earnings announcements, so volatility is low. If that strong and sudden rise comes, we do n't usually see spikes in volatility with large upward moves , but I think this is one scenario where you might see an increase in volatility alongside the price.