A high-probability trade on Netflix into earnings used by options traders

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A high-probability trade on Netflix into earnings used by options traders
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Netflix (NFLX) kicks off tech earnings on Wednesday after the market close. For many, NFLX is the harbinger of how the rest of the sector's earnings will play out.

As the earnings date starts approaching, it brings a lot of uncertainty with it. Everybody knows that earnings announcements can bring a big price move, but it is difficult to predict the direction of the price movement. Let us start by examining the historical price movement in NFLX after the last four earnings events. You will notice that most of the earnings moves are mostly contained within 9%. There can always be outliers like that 13.3% move in Oct.

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