Buy Call DIS

May 24, 2023
Sell DIS Position

Our BABA and DIS positions are not working as the stocks have performed poorly after earnings in the last two weeks. It’s time to throw in the towel on both of those positions so we can move that capital into an earnings season winner, DKNG (more below).

To execute these trades you need to:
Sell to Close DIS September 105 Calls
Buy to Close DIS September 130 Calls.

Stepping back, I’ve been adding earnings season winners in UBER, BSX and now DKNG, targeting a move higher later this year. The longer-term call buys should somewhat shelter us from the market pulling in if our friends in Washington, D.C. play with fire the next couple of weeks.

Finally, while the premiums collected via our sales of BABA and DIS are not large ($2.75 and $1.25) I am putting that capital right into our DKNG call buy, of which I am buying a full position.

February 8, 2023
Adjust Existing Position: Against your Disney (DIS) September 105 Calls, Sell the September 130 Call for $4.50 or more.

Disney (DIS) will report earnings after the close today. And while the stock looks great, and our position is in terrific shape, let’s reduce our premium at risk by selling a call that is $18 out-of-the-money.

To execute this trade you need to:
Sell to Open the September 130 Call

After this adjustment our position will be:
Long DIS September 105 Call
Short DIS September 130 Call

This call sale will drop our cost basis on our position to $7.90 (approximately).

The ideal spot for this position is at 130 or above on September expiration, as our spread would be worth $25.

Please note, even though we are selling a call today, there is no question that our position is bullish.

Finally, expect a deeper look at DIS earnings later today.

January 27, 2023
Sell a Third of Existing Position: Sell a Third of your Disney (DIS) September 105 Calls for $15.40 or more.

DIS is breaking out to a new recent high today, and looks terrific. Let’s take advantage of this stock strength, sell a piece of our position for an approximate 20% profit, and then go for greater gains in the days/weeks to come.

To execute this trade you need to:
Sell to Close a Third of your DIS September 105 Calls

Please note, the $15.40 price is mid-market, and we may not get filled. However, because the market is so strong today, let’s offer our calls, and see what happens into the close of trading.

January 23, 2023
Buy the Disney (DIS) September 105 Calls (exp. 9/15) for $13.20 or less.

As I wrote this morning in my Weekly Review, option activity heated up in Disney (DIS) last week. And this bullish option activity is continuing today, as DIS, and the market, continue to strengthen. Here are the call buys from today and last week:

Today - Buyer of 20,000 Disney (DIS) June 80 Calls for $27.81 – Stock at 104.5 (rolled from February calls)

Today - Buyer of 1,800 Disney (DIS) January 135 Calls (exp. 2025) for $10.80 – Stock at 105

Wednesday - Buyer of 8,000 Disney (DIS) March 110 Calls for $2.38 – Stock at 100.5

Thursday - Buyer of 5,000 Disney (DIS) April 110 Calls for $2.53 – Stock at 98.

DIS will report earnings in two weeks, which could be the catalyst this call buyer is targeting. Or, the call buyer could be targeting changes for the company, as activist Nelson Peltz has built a large position and is agitating for change to enhance the share price.

Regardless, of the potential reasons, with the market possibly getting in gear, let’s get involved with DIS via an at-the money September call buy.

To execute this trade you need to:
Buy to Open the DIS September 105 Calls

The most you can lose on this trade is the premium paid, or $1,320 per call purchased.

The risks I see in this trade are largely general market risk as well as earnings that will be released on February 8.

And while it is possible the market could fall apart yet again, I really like the bullish option activity, and am going to add DIS to the portfolio today.