Khouw Recommends Netflix 65/78/88 Covered Strangle for 20% Annualized Return
Updated
Updated · CNBC · Jul 27
Khouw Recommends Netflix 65/78/88 Covered Strangle for 20% Annualized Return
1 articles · Updated · CNBC · Jul 27
Summary
$1.10 in net credit is the centerpiece of Mike Khouw’s August 65/78/88 Netflix covered strangle, offering about 1.5% over 25 days and more than 20% annualized.
Netflix near $70 and trading at 18.9 times forward earnings underpins the trade, with Khouw arguing the stock has become cheaper even as margins, cash flow and ad monetization improve.
The setup stays profitable between $63.90 and $79.10, caps upside risk with the long August 88 call, and would leave an effective entry price of $63.90 if shares are assigned below $65.
Khouw’s broader case rests on Netflix’s roughly 325 million paying members, ad revenue expected near $3 billion this year and a path toward $10 billion by 2030, plus AI-driven cost savings.