>>>Join me for the “Final Hour” LIVE at 3 p.m. ET!<<<
Let’s talk about a trade I’m eyeing on Netflix (NFLX) — which I covered on Monday’s edition of “Final Hour,” my trading day-closing show that you’re all invited to watch and participate in at 3 p.m. ET!
NFLX is sitting at these all-time highs, and the big question is: Is now the time to buy, or should we wait for a discount?
For me, I’m not interested in jumping in at these levels. At north of $700 per share, Netflix is just too rich for my blood to take a full position. But that doesn’t mean I’m sitting on the sidelines. I’m looking for a smarter way to get exposure to Netflix — without tying up a huge chunk of capital.
Here’s what I’m thinking…
Why I Won’t Buy at $700 — And What I’m Doing Instead
We all know Netflix has been on a steady climb, but I’m looking at potential earnings volatility. If the stock takes a hit, I’m ready to scoop up shares — but only if they come down to a level that makes sense for me.
I’ve got my eyes on $500 as a potential entry point. I think that’s a much better spot to own shares, and it’s not too far off considering we’ve seen Netflix have some wild swings in the past.
Now, I’m not going to just sit around and wait for the stock to magically drop. Instead, I’m structuring a trade that lets me make money while waiting for that perfect entry price.
Learn how I plan to do this by watching Monday’s episode here!
Why $500 Is My Sweet Spot
If Netflix were to drop down to $500, I’d be getting around a 30% discount from where we are today. And I’d be happy to own shares at that price, because from there, the upside potential is much more attractive.
In fact, I’d be quickly lowering my cost basis through covered calls and other income-generating strategies, targeting a $400–$500 range for the stock. If we get back to the highs, great. If not, I’ve still got plenty of room to profit.
But what if Netflix keeps climbing?
If Netflix doesn’t drop and keeps heading higher, no problem. I’ll just let the bull put spread work for me, collecting the premium and moving on. I don’t have to chase the stock at these highs, because I’m making money even if I don’t end up owning it.
That’s the beauty of this strategy — I get paid either way.
The bottom line is this…
I love Netflix long term, but not at $700. I want to own it at $500 or less, and I’m using options to put myself in a position to win — whether the stock pulls back or continues climbing.
Remember, it’s all about managing risk and keeping yourself in a position where you don’t have to force trades. There’s always another opportunity, so don’t get sucked into paying top dollar for a stock when there are smarter ways to play it.
I’ll keep you updated on this trade as it progresses, but for now, I’m happy to let Netflix come to me — on my terms.
I’ll see you in the markets.
Chris Pulver
Chris Pulver Trading
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*This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk.
P.S. This Is Only for the Right Type of Trader…
Nate Tucci’s been spreading the word high and low to make sure everyone has a chance to hear his huge news.
In case you haven’t heard it yet…
After pouring through the market and all his research, he’s uncovered his Trade of the Year. But there’s something you need to know…
I expect most people might ignore his Trade of the Year. You see, right now, traders can be easily divided into two types.
First, there are those who are too DISTRACTED by the presidential election, by Fed rate cuts, and by all the other worries going on right now. And who can’t focus on what could be the market’s biggest opportunity…
Even though Nate sees an amazing 10X earnings growth potential within just 15 months.
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We can’t promise returns or against losses, but if you’re the second type of trader…
Here’s your chance to see why Nate believes we’re on the brink of something explosive between these two car giants.
