Markets felt a sense of relief as stocks bounced back after Donald Trump’s speech. He clarified that there would be no military action to take Greenland. This reassurance eased worries about a potential breakdown in Western alliances, sparking a stock rally and lowering the VIX. Although the EU parliament paused work on a trade deal with the US, the reduced chances of a trade conflict fostered a more positive market environment. This optimism helped Netflix recover from its recent losses, with shares testing the $80 level for the first time since April.

Will Bargain Hunters Step In?

With Netflix shares now trading at a lower valuation than six months ago, many wonder if bargain hunters will make a move. The increased risk appetite shows a shift in market sentiment following Trump’s comments. We recall the relief rally in mid-2025 when the former President stepped back from his plans regarding Greenland. That moment caused the VIX to drop below 15 for the first time in months, highlighting how sensitive markets are to easing geopolitical tensions. This event established a pattern of sharp spikes in volatility followed by fast recoveries, a trend to keep an eye on in the upcoming weeks. Concerns about a US-EU trade war, which seemed imminent in 2025, have significantly reduced. With the revised Transatlantic Trade and Investment Partnership now active, recent data from Eurostat reveals a 5% increase in US imports during the last quarter of 2025. This stability suggests that selling out-of-the-money puts on broad market ETFs like SPY could be a good strategy for collecting premiums.

Netflix Stock Performance

Back in April 2025, Netflix found support around the $80 level, rewarding bargain hunters. The stock has since surged to over $140 after its Q4 2025 earnings report showed subscriber growth exceeding estimates by more than 2 million. Traders with a positive outlook might consider buying call spreads to take advantage of further momentum while controlling their risk. The main lesson from the geopolitical tensions in 2025 was how quickly implied volatility can drop at the first sign of resolution. With the VIX currently close to a low of 13, purchasing long-dated, out-of-the-money puts on major indices presents a low-cost hedging strategy. This offers affordable insurance against any sudden return to the tensions seen last year. Create your live VT Markets account and start trading now.

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