Netflix’s (NFLX) short position has decreased ahead of earnings, suggesting bullish sentiment. However, historical data shows weak predictiveness from shorts. FANG stocks display similar patterns, with NFLX's lower short position standing out.

NFLX is one of the largest movers during earnings announcements, typically moving 10%, while the current implied move is 7%.

The stock has recently declined by 3%, but historically, this does not indicate anything significant for earnings.

The short position has decreased recently, reflecting bullish sentiment; however, historically, short sellers have often been incorrect. This could pose a risk for the stock, but it remains a weak signal, and the overall movement is minimal.

Historically, in the week leading up to earnings, the stock price and short position tend to move in the same direction. This trend continues today, but it is not predictive.

Longer-Term Trends

NFLX’s short position does not correlate with its stock price on a monthly basis, but there is a general trend where the percentage of short positions decreases as the stock price increases.

The notional size remains relatively consistent as the price rises, while the percentage of float declines. This pattern suggests an effort to maintain notional size by reducing the floated percentage as the stock price increases.

NFLX Short Notional Size

NFLX Short as a Percent of Float

NFLX In Context with the FANG Stocks

Among the FANG stocks, with the exception of AMZN, all have shown similar patterns in their short positions over the past three months. NFLX generally has a higher percentage of short positions, likely due to its smaller size.

This trend persists despite META's 11% increase over the last quarter, NFLX's 5% rise, AAPL's unchanged status, AMZN's 6% decline, and AAPL's 14% drop. The short position does not appear to be influenced by the stock price.

Over the longer term, the other stocks have larger short positions while NFLX's is comparatively lower, making it stand out. short position does not correlate with its stock price on a monthly basis, but there is a general trend where the percentage of short positions decreases as the stock price.

NFLX’s short position does not correlate with its stock price on a monthly basis, but there is a general trend where the percentage of short positions decreases as the stock price increases.

NFLX is the first of these stocks to report earnings. Notably, GOOG’s earnings returns are negatively correlated with NFLX, and META often moves in the opposite direction.

AAPL, AMZN, and GOOG may exhibit specific patterns around earnings as well.

NFLX’s recent short position decline offers limited insight ahead of earnings. While FANG stocks show similar trends, past data shows weak short signal predictiveness for NFLX and its peers.

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