For full protection, buy ATM options ($98 strike) - all you can lose is the premium you pay (around $5 per 100 shares). So if NFLX will lose say $15, your puts will be worth $15, and you gain $15 minus the premium.
If you want just "black swan protection" - against catastrophic loss, you can buy 90 strike. It will cost much less (around $2), but also protects you only if NFLX goes below $90.
Another member suggested another strategy:
"Alternatively, NFLX volatility is pretty low. Expected move around $9 - don't know the cost basis, but this is what I would do: AUG +95p / -90p / -110c for zero cost.
Eg buying bear put spread and financing with 110 call. If NFLX goes down to 90, your loss (assuming 98 cost) is $3. Max gain at 110 is $12. Any outsized move down below 90 has no protection, and above 110 no gain."
This is also a viable strategy, but it will protect you only down to $90. If the stock collapses below $90, you are not protected.
Here are few other options:
Collar
Buy July 22 90 put
Sell July 22 105 call
You are protected below $90, and the gains are capped at $105.
Calendar
Buy August 19 90 put
Sell July 22 90 put
You basically buying the put expiring in 4 weeks and reducing the price by selling weekly put expiring the next week.
Advantage: reduced cost (only 0.80) and very nice gains if the stock goes down to ~$90.
Disadvantage: the spread will start losing money if NFLX crashes much lower than $90.
There is no "best strategy" here. You can construct the trade based on your outlook and risk tolerance. And this is the beauty of options - there are endless possibilities to hedge, speculate etc. It's up to you to decide what to do, based on what you want to achieve.
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