Netflix has eased from recent highs, which often prompts the classic investor question: “Is this the right moment to buy, or should I wait?” A defined-price approach helps bring structure to that decision.

Setting a preferred entry point with a defined-price approach

Some investors prefer to buy only if the price comes down to a level they find more reasonable. Instead of placing a limit order and waiting passively, they can make a formal commitment to buy at that level in exchange for receiving income upfront.

This method uses a cash-secured put. The terminology is less important than the behaviour: you choose your price, reserve the cash needed to buy the shares, and receive income for being willing to take ownership if the market reaches that level. If the shares never fall that far, you simply keep the income.

After the stock split, capital requirements are more manageable, making this technique easier to scale.

A practical example: committing to buy Netflix at 107.50 USD

Important note: The strategies and examples provided in this article are purely for educational purposes. They are intended to assist in shaping your thought process and should not be replicated or implemented without careful consideration. Every investor or trader must conduct their own due diligence and take into account their unique financial situation, risk tolerance, and investment objectives before making any decisions. Remember, investing in the stock market carries risk, and it's crucial to make informed decisions.

With Netflix trading around 110 USD, an investor may prefer to target a slightly lower entry level. The 107.50 USD level offers a clear and simple illustration.

Using the prices shown in the trading ticket:

• Chosen level: 107.50 USD
• Income received upfront: about 117 USD
• Cash reserved for the commitment: 10,750 USD
• Commitment length: roughly eight days
• Approximate short-term yield on reserved cash: a little over 1% for the period

This yield is useful as context, but it should not be seen as a forecast. Short-term yields often look large because the timeframe is so brief and driven by specific volatility conditions around the split.

What happens at expiry?

If Netflix finishes above 107.50 USD
You keep the income and do not buy the shares. This is the most favourable financial outcome, although it means you do not establish the position.

If Netflix finishes below 107.50 USD
You buy 100 shares at 107.50 USD. After subtracting the upfront income, your effective entry price is around 106.33 USD. If the share price continues falling, your losses behave exactly as they would for any shareholder.

A balanced view: potential benefits and limitations

Potential benefits

• You define your preferred buying level rather than accepting the current market price.
• You receive income while waiting, providing compensation for your patience.
• Your effective entry level is slightly lower because of the upfront income.
• The approach brings structure and discipline to the decision-making process.

Important limitations

• You may end up buying shares during a market decline.
• Any losses after that point follow the normal behaviour of share ownership.
• The short-term yield reflects a specific moment and should not be extrapolated.
• Cash must remain reserved, which reduces flexibility in the portfolio.

This technique is best suited to investors who already see Netflix as a long-term holding and prefer a more controlled, less reactive approach to entering the position.

Takeaway

Netflix’s stock split changes the look of the share price but not the business itself. For investors who want exposure but prefer to set their own conditions, committing to buy at a chosen level — and receiving income while waiting — can offer a calmer, more deliberate way to approach the stock. It neither removes risk nor promises better outcomes, but it gives investors a structured decision at a time when headlines and market moves may create noise.