P2 Trade Alert — NFLX Diagonal:

Selling the Earnings Volatility Premium

Regime Read

• Volatility (the real driver): Earnings lands one day before July expiry, inflating July IV ~8 points above August. We sell the rich July premium, own the cheap August premium. After the report, the July earnings IV crushes — and we’re short that call, so the crush works for us.

• Momentum: NFLX is the most beaten-down mega-cap on our board — down 16% on the month, 23% on the year. The selling is mature, not fresh; this is an oversold name where a stabilization or bounce is plausible, and our long 77 call gives us that upside.

• Why this structure on this name: In this morning’s markets note we warned against selling naked puts on falling knives. The diagonal is the answer — defined risk from the first second, financed by the richest premium on the board.