Netflix Shares Tank And Traders See Further Downside

Shares of Netflix Inc NFLX Wednesday tanked more than 35% after the company reported a decline in net subscriber adds.

On CNBC's "Options Action," Tony Zhang said the stock traded a whopping 16 times its average daily volume.

A trader sold 5,076 of the June 225 calls at $17.84 per contract on average and used that premium to purchase 13,536 of the June 215 puts at an average price of $16.44 per contract, he mentioned.

Check out other tech stocks making big moves in the premarket.

“They laid out $22 million in premium to bet on further downside here for Netflix, while collecting about $9 million in premium by selling those upside calls,” Zhang said. This reflects a “fairly bearish view” on Netflix.