Will Netflix Shares Decline Further?

Shares of Netflix Inc NFLX Thursday slipped another 3.52% after tanking more than 35% in the previous trading session. The sell-off was driven by the company reporting a decline in net subscriber adds.

On CNBC's "Options Action," Mike Khouw of Optimize Advisors said the stock traded four times its average daily volume and traded nearly 800,000 contracts.

Although lots of puts were traded over the last couple of days, “if you look a little bit deeper under the surface, it seems like some people are beginning to dip their toe in the water and think that they’re ready to draw a line in the sand,” Khouw mentioned.

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

There were some upside calls purchased that expire next week and out to May and some of the put activity was “actually sales,” he added.

There was a seller of 1,000 of the May 175 puts for an average price of $2.60 per contract on average, Khouw stated.

“We’re starting to see some people getting in here and thinking maybe it’s getting a little bit cheap now,” he said.