If you're bullish on Netflix, you can consider a vertical put spread. This strategy involves selling a put option while simultaneously buying another put option at a lower strike price. The goal is for the stock to stay above the strike price of the sold put.
Here's the setup:
• Sell to Open: 21-Jul-23 445 Put
• Buy to Open: 21-Jul-23 440 Put
You are selling to open a put option with a strike price of $445 and buying to open a put option with a strike price of $440. This is a credit spread strategy where you receive a net premium of $235 (the difference between the premium received from the sold put and the premium paid for the bought put).
The maximum risk for this trade is $265, which is the difference between the strike prices of the two options ($445 - $440 = $5) times 100 (since each option contract represents 100 shares), minus the net premium received.
The maximum profit is the net premium received, which is $235.
The breakeven point for this trade is $442.65. This means that you will start to make a profit if Netflix's stock price is above this level at expiration.
The probability of profit is 58.18%. This is calculated based on the delta of the short leg.
The trade has 3 days to expiration (DTE) and the implied volatility rank is 32.20%.
The position greeks are as follows: Delta is 0.0406, and Theta is 0.0856. These values indicate the sensitivity of the position's value to changes in the stock price and time decay, respectively.
Neutral Strategy: Iron Condor