7 Aug
on the 5 aug show Mike has a trade on Disney by selling the Aug monthly 105/100 credit put spread for $1.63 credit. Carter and Tony add some comments, here is the video clip:
couple points, first as a note that earnings are THIS week and trade is for next weeks options. nothing bad about that but premium is only about 10cents better by going out one more week, slightly better volatility crush by using this weeks.
second, more my taste, the strikes are too close to at the money, with 105 being a 40 delta and stock at 106ish now.. granted Mikes thesis is that stock moves higher or sideways. looking at options pricing right this second, they are pricing in a $7 dollar move by opex. a 40 delta credit put spread is not giving me enough premium for that added risk.. $1.63 credit = $3.37 max loss. more a risk one to make one ratio would be preferable for this delta.
Carter and Tony both have positive comments as well, so going with those thoughts im going to make an assumption that they surprise to the upside. Maybe because of Obi Wan , maybe not and slightly move in excess of the expected move. I will "save" this order and review strikes right before earnings to consider putting some skin in the game. But in order to make the trade i want to pay just a little.
So my trade would be the Aug12 weekly 112/115/120 broken wing call fly for maybe .15 debit (cheap ass), buy the 112, sell two 115, buy the 120) , profit range at opex is 112-117.
Stock goes down or sideways or up just a bit, no harm no foul, was just .15 . Mikes trade will work as he discussed, just too much of a coin flip for the oversize risk.
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