Disney is out with earnings after the bell. We have a new equity and option trade in Disney. We are starting a longer-term equity position today with a buy. Buy a half a position in Disney as of this market update. We plan on entering the other half at some point in the future. We also are buying a debit call spread in Disney for their earnings. This is a bullish options trade that expires Friday and is high risk, that will result in a 100% loss on many occasions.

Equity Trade

Buy half a position in Disney. It is currently trading at $98.75. We will set a stop after we see how earnings trade, and once we enter the 2nd half of our position in the future. 

Options Trade

Buying a Debit Call Spread from $99 - $103 in Disney for about $1.40. Risking $140 to make $260 per contract. Breakeven is at $100.40. Disney is trading at $98.75. 

• Buy the Feb 9th $99 call
• Sell the Feb 9th $103 call

This should result in a net debit (cost) of about $1.40. Your max risk is the $1.40 or $140 per contract pair. Your max profit is about $2.60 or $260 per contract pair. This is a high-risk trade which expires on Friday. We are looking for Disney to pop higher on earnings tonight after the bell. Don't pay more than $1.50 if the market moves higher before you get a chance to enter this trade. 

The market is pricing in about a $5.65 move in either direction in DIS by Friday's close. Disney is currently trading at $98.75 

You can buy the equity, or the option trade, or both, whatever fits you best.

Disney has been chopping around at its .618 on a monthly basis since June of 2022, almost 2 years. Their next big slate of movies is not until 2025-2026, but things could start lining up with them ahead of that, and the news last night on the new deal with Fox and WBD for a streaming partnership built on sports will probably be advantageous going forward, and we may even get more details on that tonight. We just traded above a B point on a daily basis with volume. 

Disclaimer: Trading in securities such as stocks, options, indexes, currencies, and futures involve risk and should not be undertaken without due diligence and serious independent study. Options, stocks, currencies, and futures trading involve substantial risk. Subscribers may carry out their trading based on what they learn from “Rocket Equities & Options” however all risks of potential financial losses are the customer’s responsibility. TFNN, Corp. will be in no way liable for financial losses resulting from trading decisions based on this newsletter. Past performance is no guarantee of future results. Reproduction in whole, or in part, is not permitted without prior written consent. Copyright 2023 all rights reserved.