Netflix Stock Trading at Bargain Levels—Here's Why Put Options Sellers Are Taking Notice

The Setup: Netflix’s Sharp Correction Creates Opportunity

Netflix stock has faced considerable pressure, sliding 27.9% from its October 2025 peak. Trading at $89.46 as of January 9, 2026—down 4.59% since year-end—the streaming giant has left many investors nursing losses. Market participants have blamed acquisition speculation surrounding Warner Bros. Discovery for the selloff. Yet within this decline lies something worth examining: elevated option premiums that make selling put options worth a closer look.

Why Now? The Premium Environment

When stocks drop sharply, those who sell put options get paid more. Right now, Netflix put options are offering juicy returns precisely because anxiety is high. For anyone willing to set aside capital and take on defined risk, the current environment presents an interesting income-generating scenario.

The Math Behind Selling Out-of-the-Money Puts

Let’s walk through a concrete example with puts expiring February 13, 2026.

The $85 Strike: Higher Risk, Higher Reward

Setting the strike at $85—roughly 5% below current levels—nets you a $2.66 premium per contract. For someone committing $8,500 in collateral, that’s $266 credited immediately, representing a 3.13% one-month yield. The catch? This contract carries a delta above 0.32, meaning there’s nearly a 1-in-3 probability Netflix closes below $85 before expiration. That’s meaningful downside exposure.

The $83 Strike: Conservative Approach

Prefer less drama? The $83 put (7.2% out-of-the-money) offers a $1.93 premium—a 2.33% monthly yield. Delta of 0.2553 translates to a 25% assignment probability, substantially lower. Your breakeven lands at $81.07 (that’s 9.8% below the current price), providing a cushion.

Understanding the Risk

Selling put options doesn’t magically eliminate downside—this must be clear. If Netflix tumbles below your strike before expiration, you face unrealized losses. Assignment means owning 100 shares at your put strike, which could sting if the stock continues lower. However, owning shares at $83 (or $85) might not be catastrophic if Netflix’s long-term outlook remains intact. Selling covered calls afterward could offset some losses, or you simply wait for recovery.

What Professional Analysts Think

Here’s the contrarian view: despite the recent thrashing, Wall Street remains surprisingly bullish. An average price target from 43 analysts sits at $125.71—a 40%+ upside from current levels. Other analyst consensus points yield even higher targets: Barchart cites $127.82, while AnaChart reports $113.17 across 29 analysts. An October analysis even valued Netflix at $137.40 based on third-quarter free cash flow strength and margin expansion.

The Bottom Line

Netflix’s decline has created a genuine dilemma for income-focused traders. Selling out-of-the-money put options allows you to establish a lower cost basis while collecting immediate premium. The $85 put yields 3.13% monthly; the $83 put yields 2.33% with substantially lower assignment risk. If assignment happens, you’re potentially purchasing shares near levels that analysts believe offer significant upside—a reasonable outcome given your premium collection. For those comfortable with defined risk and looking to deploy capital strategically, Netflix put selling merits consideration.