If you enjoy Netflix, Inc. (NASDAQ:NFLX) as a consumer, you’re not alone. However, if you’re an investor looking to buy NFLX stock, it’s a better time to subscribe to a trading plan that positions using a bull put spread. Let me explain.

It’s been a few weeks since Netflix’s ‘”subscriber scare” following NFLX stock’s most recent earnings confessional. Realistically though, the report was anything but scary. And after a short-lived corrective spook lasting for all of two sessions, it’s been an entirely different and bullish program.

Since establishing a post-earnings low of $138.66, shares of NFLX are up about 20% as once-spooked investors have decided to subscribe to Netflix as an investment, which continues to demonstrate its dominance in the streaming market, both domestically and internationally.

Sure, Netflix shares are expensive by some bean-counting metrics. There is a forward price-earnings ratio of 87, or price-sales of 7.50, to consider. But it should be also appreciated, however, that it is not an unusual price to pay for a growth stock like NFLX.

As well, Netflix has by and large continued to improve its financials. That point was brought home by management this past quarter as it urged investors to actually focus, for once, on its income statement! Far from a horror show, that sounds like more of a “bromance” for longer-term Netflix bulls.

Supporting NFLX stock’s price tag, the company continues to deliver by a very wide and improving margin over competitors like Amazon.com, Inc. (NASDAQ:AMZN), Hulu or other wannabees falling by the wayside and whose names have already been forgotten.

Bottom line, there’s a lot more reasons to be bullish on NFLX and its business prospects than not. That’s not to say I personally subscribe to buying Netflix shares right here, however.

NFLX Stock Weekly Chart

Our technical outlook was optimistic for eventual higher prices in Netflix shares. However, an extended overall market and overbought stochastic condition in NFLX had us cautiously outlining a bull put spread, rather than a strategy requiring immediate upside to profit.

The strategy worked well in capturing the full credit as NFLX stock proceeded to form a three-month flat base before finally breaking out again and rallying an additional 14%.

Like last time, I would once again stress a bit of caution and look to position in the trend on a pullback, or using a bull put spread. The chart patterns have largely exhausted themselves now, and shares are now overbought based on the Bollinger Bands and stochastics.

NFLX Credit Put Vertical Spread

Given what’s been addressed and in reviewing NFLX stock’s options, the 14 July $150/$142 put spread is attractive.

With shares of Netflix at $164.74, the out-of-the-money vertical is priced for a credit of 50 cents mid-market. If NFLX is above $150 at expiration the sold premium offers a return of 6.66% for just over a one-month holding period.

The position also allows for a limited risk means to buy shares near potential technical support of the flat base pattern if NFLX trades below $150. That’s a nice feature to be sure.

Lastly, the NFLX put spread also offers a margin of safety of over 9% before breaking even and expires prior to the next earnings announcement. In our view, this strategy sounds like a good way to ensure a much happier ending for Netflix investors right now.

Investment accounts under Christopher Tyler’s management do not currently own positions in any of the securities or their derivatives mentioned in this article. The information offered is based upon Christopher Tyler’s observations and strictly intended for educational purposes only; the use of which is the responsibility of the individual. For additional market insights and related musings, follow Chris on Twitter @Options_CAT.