This Strategy Pays You 8.2% While Lining Up NFLX At Bargain Prices

Netflix (NFLX) stock is trading at a rare discount – down 9% on Friday after the company guided Q2 revenue and earnings slightly below market expectations. For long-term investors, that kind of pullback can open a window.

The question is: Is NFLX a good bet at current levels – and an even better one at a 30% discount around $70 per share? If you think so, here’s a trade worth considering.

8.2% annualized yield at 30% margin of safety by selling Put Options.

• Sell a long-dated Put option expiring 3/19/2027, with a strike price of $70
• Collect roughly $273 in premium per contract (each contract represents 100 shares)
• That’s about 4.2% annualized yield on the $7,000 you’re setting aside for the possibility of buying the stock
• This cash, parked in a savings or money market account, will earn an extra 4.0%, taking total yield to 8.2%
• And you give yourself a chance to buy NFLX stock at deep discounted price of $70

However, this is not the only stock strategy in town. Trefis High-Quality Portfolio is a sophisticated framework designed to reduce stock-specific risk while giving upside exposure.

While Netflix is seeing a near-term dip, much of SaaS has already gone through a deeper reset, largely driven by AI disruption.
Take Figma. The chart looks weak. The business does not.

Possible Trade Outcomes: You Win Either Way

If Netflix stock stays above $70, you keep the full $273 premium – that’s 3.9% extra income over the next 336 days on cash that might otherwise earn you 4.0% or less. You never buy the stock and simply walk away with the cash.

If Netflix closes below $70, you’ll be obligated to buy 100 shares at $70. But thanks to the $273 premium, your effective cost basis is just $67.27 per share – a roughly 31% discount from the current level.

And this is far from a speculative bet. Netflix is still expanding, with consensus projecting over 13% revenue growth this year. Operating margins are expanding too, and cash flow last year was a massive $12 billion for a 25% free cash flow margin. (See key margins metrics for Netflix)

But to hold this trade with conviction, you want to see long-term upside in the stock. Because if it comes to it, you want to be excited about buying the stock cheap.

Check out Netflix Investment Highlights

If you are not comfortable with options or stock-specific trades, portfolios are the way to go, as they can protect and grow wealth even better.

Portfolios Beat Stock Picking

Individual stocks can soar or tank, but one thing matters: staying invested. The right portfolio can help you stay invested, capture upside, and mitigate the downside associated with any individual stock.

Beating the market consistently is hard, but the Trefis High Quality (HQ) Portfolio makes it look achievable. By selecting 30 high-conviction stocks, the HQ strategy has historically outpaced the S&P 500, S&P Mid-cap, and Russell 2000. See how this curated selection delivers superior risk-adjusted returns in our detailed performance factsheet.