Netflix Stock Eyes Worst Day Since 2022 After Earnings Blunder

Core Insights - Netflix Inc (NASDAQ:NFLX) experienced a significant decline of 9.8%, trading at $1,120.59, following the release of its third-quarter earnings which reported adjusted earnings of $5.87 per share on $11.5 billion in revenue, missing estimates primarily due to an unexpected tax dispute in Brazil [1][2]. Financial Performance - The adjusted earnings per share of $5.87 fell short of market expectations, contributing to the stock's drop [1]. - The revenue of $11.5 billion was reported for the third quarter, but the earnings miss has raised concerns among investors [1]. Stock Performance - The stock is facing its worst single-session drop since April 2022, with shares sliding to their lowest level since May [2]. - Year-to-date, NFLX's gain has decreased to 28%, although the 200-day moving average may provide some support [2]. Options Activity - There has been a notable increase in put options activity, with the stock's 50-day put/call volume ratio ranking higher than 90% of readings from the past year [3]. - The Schaeffer's put/call open interest ratio (SOIR) of 1.05 is in the 5th percentile of annual readings, indicating a bearish sentiment [3]. Trading Volume - Following the earnings report, options trading has surged, with 100,000 calls and 87,000 puts traded, which is seven times the average daily rate [4]. - The most actively traded options include the weekly 10/24 1,100-strike put and the 1,200-strike call, with positions being sold to open at both strikes [4].