Netflix Stock Pressure Netflix recently announced plans to buy Warner Bros Discovery for $72–83 billion, which surprised many people. This deal would give Netflix access to a huge library of content, including HBO originals, DC superheroes, and the Lord of the Rings franchise. While this excites viewers, there are some challenges ahead, such as securing financing and getting regulatory approval. After the announcement, Warner Bros Discovery shares increased by 6%, but Netflix shares dropped by 6.73%. This signals worries about regulatory issues and the potential debt Netflix may take on. Although this acquisition could strengthen Netflix’s position in the media landscape, doubts linger. Former U.S. President Donald Trump noted that the deal may face scrutiny due to its impact on market share. In the short term, Netflix’s stock is under pressure, moving down from a long-term trend and entering a declining channel. Support at the $100 mark and indicators of being oversold suggest there may be a temporary rebound. Over the long term, the upward trend and strong support indicate optimism that Netflix will remain a key player by 2026, despite the challenges. Immediate concerns include regulatory scrutiny, debt anxieties, and fluctuating stock prices. Key factors to monitor are political comments, signals from regulators, Netflix’s funding plans, and reactions from the industry. Until we gain more clarity, Netflix’s stock may swing around the $100 mark. Immediate Market Reaction Last week, Netflix announced its acquisition of Warner Bros Discovery, causing notable movement in the market. Netflix shares fell by approximately 6.7%, while Warner Bros Discovery shares increased by 6%. This quick response shows the market’s concerns regarding the debt and regulatory obstacles that Netflix now faces. The drop in Netflix’s stock reflects short-term uncertainty rather than a long-term opinion on the deal’s value. This acquisition would allow Netflix to control a vast content library, including HBO and the DC superhero universe—an important strategic move, despite potential complications ahead. President Trump’s recent comments suggesting that the deal “could be a problem” add more political pressure. This raises the likelihood of a long and public regulatory review process. A similar situation occurred in 2018 when the Justice Department challenged AT&T’s purchase of Time Warner, leading to months of uncertainty for traders. Implied volatility for Netflix options has risen sharply, as indicated by the broader CBOE Volatility Index (VIX), which closed at 22.5 last Friday—a three-month high. This means the market expects significant price fluctuations in the upcoming weeks. High volatility makes simple long or short positions risky, but it offers opportunities for option sellers. The daily chart reveals that Netflix is in a sensitive position, yet it remains above the important psychological level of $100. Given the expectation of erratic price movements driven by headlines, selling premium through strategies like iron condors or strangles could be a smart approach. This allows traders to profit if the stock stays within a certain range while waiting for clearer news. We should keep an eye out for a potential dip into the $96–$98 range, where many stop-loss orders may be set. A brief move into this area could flush out weak positions before a rebound attempt. Buying short-dated puts could serve as a hedge against or a way to benefit from a sharp, temporary drop. On a weekly basis, Netflix’s long-term upward trend remains strong, indicating that institutional investors are still interested in the stock. Netflix’s quarterly report from October 2025 showed a slowdown in subscriber growth, making this acquisition vital for maintaining future market share. For traders with a longer-term view, buying call options set six months out or longer could capture potential upside if the deal ultimately gets approved. Looking ahead, we’ll be watching for any new comments from regulators or the President. Details from Netflix on how it plans to finance the deal will also be crucial. Until we have more information, the stock will likely react strongly to news around the $100 level. Create your live VT Markets account and start trading now.

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