I May Short Sell Netflix Stock

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Many subscribers thank you so much for joining me today i am jeremy this is the financial education channel and today we’re talking about why i may start short selling netflix shares i’m not just thinking about short selling and also thinking about buying some put options we’re going to look at both those possibilities now first off for those of you guys who know

Me i rarely short sell stocks i rarely ever buy put options in a stock it’s like super rare like the last time i probably went negative on a company and bought put options was on ford stock and i was probably like a year ago guys so this is a rare occurrence when i see an opportunity and i want to pounce on and that’s kind of what i’m looking at it with netflix so

With that in context let’s go ahead and take a look why i’m a little bearish on netflix right here so first off netflix is a company that has a 77 billion dollar valuation a 77 billion dollar market cap guys so the company has a p/e ratio of 230 even in the slightly overvalued market we are currently p/e ratios are around 26 or somewhere around there this company

Has a 230 on it and it is fast growing those kinds of things but still so 230 at the end of the day if we look at the 52-week ranger it’s been between $92 & $191 currently this is around 175 dollar stock so a company like netflix this doesn’t trade off of rational rational ways of looking at it doesn’t trade off of you know p/e ratios it doesn’t trade off

Of any of that because if it did it obviously wouldn’t have a 230 like none of that stuff matters the base fundamentals the balance sheet people don’t even care about that in netflix this is a stock that is only people are only going into this because they think it can be you know the company worth several hundred billion dollars in the future because they can be

That big of a streaming service in those kind of things so that’s why the company like this trades away it does it’s not because of a swanda mentals and all those kinds of things guys so why am i a little bearish on netflix it’s got to be something more than just having a 230 p/e right because there’s a lot of companies that either have no pe or have insane ps and

That doesn’t mean they’re going down but this one i kind of feel is so the first off let’s look at this here so this news just came out yesterday and this is a big part of the whole whole here disney said it will launch an espn branded streaming service in 2018 in a separate disney branding streaming service in 2019 the disney service will be the only place where

Us viewers can watch new live-action animated movies from disney and pixar including toy story 4 the frozen sequel in the lion king live-action movie it also features content from the disney channel disney junior disney xd the espn brainís sports service will offer around 10,000 events a year including live programming with regional and national and international

Games then we go ahead and we look here if you look at all the different kinds of networks and whatnot disney owns it’s insane like anything espn related obviously anything a bbc view which is one of the biggest networks in the world obviously we look at the own lucasfilm’s which owns all the star wars rights channels like the history channel you go down list here

They own marvel which is basically the biggest superhero genre out there right ironman whole thor all those guys they are all those they own pixar they own vice sec network obviously they don’t anything disney related so this is a major move because now disney doesn’t base basically they don’t want to do any business with netflix after 2019 so for the next year and

A half netflix is going to be able to stream a lot of these disney related things and then after that the two companies are part in their ways disney wants to compete against netflix now so that’s a big big change in the game guys and that that in itself is a huge thing because you’re talking about disney has so much brand power it’s ridiculous like we just saw all

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The things they don’t like literally some of the biggest movies out there some of the biggest shows i mean think about you know if you had no espn so many sports are literally become irrelevant to you because how are you going to watch them espn tone so much sports content now on the star wars drawn genre i mean star wars movies are is there anything bigger than

Star wars movies out there probably not the next biggest probably after that is the marvel type movies right and they own that too so we’re talking about so much content they’re splitting from netflix now and that’s just going to be that’s just a bad thing for netflix there’s no other way of sugarcoating it other than that being a bad thing then we look at apple

Apple is absolutely a starting to compete in this game they’ve been talking about competing in it right now they suck let’s be honest apple still sucks in this game they got this new show carpool karaoke debuts on apple music for some reason but basically the way apple’s approaching it is trying to get more people to sign up for apple music which now i’m actually

A customer apple music and they’re trying to push some of these shows and they even had the show called planet of the apps that had a guy named gary vaynerchuk on it who i’m a big fan of and he’s got a huge following and i guess that show still flopped so you know it’ll be interesting to see if apple can make a success of this but apple is definitely trying things

And that’s the important thing like apple is actually going out there starting to buy shows or may start creating their own shows like they did with plan of apps which was kind of like you know i guess you could call it like a shark tank but for apps and things like that and you know they would invest in the companies so i’m looking at all this and i’m like apple’s

Definitely trying to come in this game now and apples about to take it real serious and we know apples got more money than anybody apples got more money than any government has out there guys like apple has a disgusting amount of money the ability for them to buy content if that’s what they want to do or create content at scale is unparalleled in literally any

Company in the world like netflix couldn’t even do one one-hundredth of the type of stuff that apple could do either could anybody honestly apple just got two hundred and something billion dollars that if they really wanted to throw out there and buy every show out there and move you out there they could literally do that and i’ve talked about that with friends and

Stuff before like if apple really wants to get serious in the content game like look out everybody because they have way too much money around then we look at amazon amazon competing us so if you get amazon prime then you guys basically can watch all the shows and movies and all those things for free 40,000 movies all the tv episodes and whatnot i know you know my

Wife has that we didn’t do that any time amazon prime has become more and more popular obviously because more and more people are ordering amazon we see that not amazon numbers of proof is in the pudding so you’re looking at the way a massan’s competing and that’s definitely a big threat and then also new you say if an amazon comes out and says think we have this

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Many people now on the on streaming service and this many videos again watch does that all some scare shareholders away from a netflix and i think this has all this of disney breaking away from netflix i think apple really starting to come in the game and you really start experimenting i think you’ve got amazon there and then you’ve got tons of other competitors

Right hbo is the world with hbo now you got who like you’ve got you know you still got the old guys around the dish network’s the direct tv all these people are competing for a certain amount of money that people are willing to spend on content and then you have this platform youtube which anybody can watch anything for free on any time they want right so you got

So much competition out there and i think this is really it like i talked about with netflix stock it’s all perception based when the perception changes it could devastate the stock because this isn’t like a stock that’s at at ntu or 15 pe where you could say oh well the basic fundamentals they’re going to get so down so far and earning that makes sense for me to

Pay to buy into this one and then you know the dividends would be paid out to me and whatever or whatever this one’s all about perception so i think all the perception of this competition could really devastate netflix stock in the short term now i’m looking at this one i’m thinking about possibly short selling this one short selling so basically i go short shares

I’m basically banking that they’re going to go down and i have to make more on my shares going down than what i have to pay back in margin interest i’m thinking about that but that’s not really the way i really want to do it the thing i’m kind of looking at here guys is put option so i’m looking at march 2018 so i got about seven months until these options would

Expire right i’m looking at these put options specifically the price i’m kind of looking at is around a 155 strike $155 strike so right now netflix is around 175 dollars i would have to pay ten dollars a contract right around ten dollars a contract for these 155 strikes so basically i would need netflix to go down 20 percent to one hundred and forty five dollars

Just to break even on those just to break even that’s only got about seven months to do that so it’s about a twenty percent down move their twenty percent down move on a stock like netflix that’s so volatile and i think with all this perception in over the next few months i’ve seen no reason why that couldn’t potentially happen so that’s definitely a possibility

Then of course if nothing happens with netflix talk or it goes up or basically if it go if it’s out 155 then i leave a hundred percent of my money if it’s one hundred and fifty five or above i lose 100 percent one hundred and forty five i break even a hundred and thirty five i doubled my money a hundred and twenty five i you know well over double my money and every

Ten dollars goes down i get an extra you know i get basically my principal back again and again and again again for every ten dollars it goes down past that so that’s a possibility i’m looking at i’m also looking at possibly raiding some call options so this is same time period these would expire in march of 2018 so about seven months from now and i could get

About four dollars per contract i write with a course of 100 shares all underlying so i give four hundred bucks a pop for them and i have two hundred and thirty dollars so the stock would need to go all the way from one hundred and seventy-five where it’s at now to over two hundred and thirty four dollars for me to begin losing money on those that’s a dramatic

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Move now if i win naked in that and just did naked call call writing basically it’s a little dangerous because what if say netflix stock goes to two hundred and sixty i would leave massive amounts of money like compounded compounding because it’s four dollars for every time it goes up and that’s they see my principal leads me in principal leaves me so that would

Be really bad so what i could do is cover my ass a little bit by basically taking you know let’s say i put two thousand dollars i write you know let’s say i get two thousand dollars from my call options i wrote i could like buy like $200 worth of call options on the upside just to save my ass a little bit in case the stock just went crazy so maybe do something like

A $250 strike take a little over two dollars for those so just in case of stock happen to go up dramatically you know to a two hundred sixty two hundred seventy dollars i would save some face on that because it would make out like a bandit on the 250s and it would cover a little bit of my losses there so i’m thinking about doing something like that i think the

Way i would probably do it more than any of these other ways more in short selling more than writing the options is probably just buy straight put options on the stock not a hundred percent sure if i’m going to do it yet i’m thinking seriously about i was looking into it last night and i’m just like sock the perception i think is about to change on netflix over

The next few months and that could mean a dramatic downside and moving this stock so i don’t know maybe i’ll do it maybe i won’t do it i’ll let you guys know if i do decide to buy some put options out put it on snapchat or whenever i do that trade even if i do that trade all i have to do to my regular account because in that snapchat account i set up that’s just

A regular brokerage and if you’re going to i put option do all that stuff i have to do that through my main account so i would even put that on snapchat if i decide to do that guys and so let me know what you think about this do you believe in netflix in the short term / long term what do you think about it do you think the company’s severely overvalued a you know

Two hundred thirty p i know that’s expected to maybe possibly go down to like a 90 next year or something like that like what is your opinion on this do you think it’s smart are you doing anything like this are you shorting netflix or you binary put option i would love to hear from you in that comment section the comments i don’t get too nearly enough of you guys

As far as responding and doing things like that but believe me i still read a massive amount of comments it’s just my real estate business is basically the best month it’s ever had this month and on top of that obviously i’m an investor so i’m constantly looking in the companies and then like the channels done like 45,000 views in the last 40 48 hours and totals

Which is like in the same amount think about it’s just one or two percent of people are commenting like it’s almost impossible for me to even get to anymore but i still read a massive amount in the comments and i absolutely enjoy guys so let me know what you thought about this if you just came across this channel you may want to subscribe we talk personal finance

In the channel we talk entrepreneurship i’m actual business owner i give away so many business tips we talk stock market investing more than anything check out my stock market strategy book it is linked in that description thank you for watching guys and have a great day

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I May Short Sell Netflix Stock By Financial Education

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