NFLX Call Spread Trade Posts 18% Gain on 7-Point Stock Rally: What Technical and Option Signals Reveal
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Major NFLX Call Spread Sees 18% Gain After $7.02 Stock Climb
A substantial options trade in Netflix (NFLX) caught our attention on October 27, 2025. A 1,250-contract call spread, targeting the 1200-1240 strikes for the December 19, 2025 expiration, was bought at a VWAP of $5.51 per spread. By late morning, with the underlying stock up $7.02 to $1,099.72, the spread's value jumped to $6.50, delivering buyers an 18% gain (a profit of $0.99 per contract).
Call Spread Details: Key Trade Numbers
| Metric | Details |
|---|---|
| Expiration | 19-Dec-25 |
| Strikes (Call Spread) | 1200-1240 |
| Contracts | 1,250 |
| Days to Expiration | 53 |
| VWAP Trade Price | 5.51 |
| VWAP Bid/Ask | 5.03 / 5.95 |
| Stock Reference Price at Trade | 1,092.70 |
| Stock Price at 11:30 | 1,099.72 |
| Spread Price at 11:30 | 6.50 |
| Profit Per Contract | 0.99 (18%) |
| Total Capital at Risk | ~$344,000 |
| Potential Max Payout | ~$2.2 million |
To reach maximum profit, the buyer needs NFLX to close above $1,240 at expiration, transforming a $344,000 outlay into as much as $2.2 million if the move materializes.
Technical Analysis: Bearish Signals Dominate Despite Short-Term Gain
Despite the impressive pop that boosted the call spread, Netflix's broader technicals look shaky. NFLX is up 0.46% on the day, breaking above its expected daily resistance (1,111.13) but slipping below recent moving averages.
- Current Price: $1,099.72
- From 20-Day MA: -7.3%
- From 50-Day MA: -9.0%
- From 250-Day MA: +3.3%
- Bearish Crossover: The 20-day MA is now below the 50-day, historically a bearish sign.
Performance relative to the S&P 500 (SPY) tells a mixed story: Netflix trounced the index over one year (+45.8% NFLX vs +19.2% SPY) but has underperformed in recent months, lagging SPY by nearly 17 percentage points over the last two weeks alone.
| Duration | NFLX Return | SPY Return | NFLX Low | NFLX High |
|---|---|---|---|---|
| Today | +0.5% | +0.9% | 1087.30 | 1102.28 |
| 2 Week | -9.9% | +4.7% | 1087.30 | 1248.60 |
| 1 Month | -8.6% | +3.4% | 1087.30 | 1248.60 |
| 3 Month | -6.9% | +8.0% | 1087.30 | 1267.10 |
| 6 Month | +0.3% | +25.7% | 1082.62 | 1341.15 |
| 1 Year | +45.8% | +19.2% | 747.77 | 1341.15 |
| YTD | +23.4% | +17.5% | 821.10 | 1341.15 |
| 3 Year | +289.4% | +85.9% | 252.09 | 1341.15 |
| 5 Year | +125.3% | +107.1% | 162.71 | 1341.15 |
The short-term underperformance compared to SPY adds caution, especially in the context of bearish technical indicators.
Option Skew Indicator Flags Bearish Sentiment
Options market data offers additional context: The 30-day implied volatility skew is at a 29% rank, which is toward the bearish end of the historical range (0% is most bearish, 100% most bullish). This suggests that, even as some traders are betting on sharp moves up via call spreads, the broader market remains cautious about Netflix’s near-term prospects.
Potential Catalyst: Securities Law Investigation Could Add Volatility
Investors should note that legal headwinds may influence volatility. Robbins Geller Rudman & Dowd LLP has launched an investigation into potential violations of U.S. federal securities laws involving Netflix, Inc. If you have relevant information or wish to follow the developments, see this link.
Strategic Takeaways: High Upside, Real Risks
Large call spreads like this often reflect bullish directional plays or sophisticated hedges—yet this trade's gain was turbocharged by an immediate move, not just a steady trend. If NFLX reaches $1,240 by December 19, the trade pays out handsomely, but the recent underperformance and technical crossovers should remind investors that options profits can vanish just as quickly.
Interested in more multi-leg trades or unusual spreads? Check out the NFLX multi-leg trade analyzer and explore a wider universe on the Multi-Leg Option Trades Screener.
Bottom Line: Market Signals Lean Bearish Despite Large Upside Bet
This eye-catching NFLX call spread captured quick gains, but a look under the hood reveals that most technical and option indicators skew bearish. Investors and traders may want to monitor both legal headlines and ongoing technical levels—while the potential reward is large, the path there could remain rocky.
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