8/14/2021 Plan:
This week we look at Disney (Ticker: DIS)
8/14/2021 Plan (continued):
- DIS – Sell the Sept 10th 170/165 put spread for 0.46 or
- DIS – Sell the Sept 17th 170/165 put spread for 0.59
- TTWO – Sell Sept 17th 150/145 put spread for 0.75
- Prices are as of market close 8/13/2021, actual fill and strikes may differ depending on Monday’s open, post will be updated accordingly.
- All trades are for educational purposes and do not constitute advice
8/14/2021 Commentary:
Disney had earnings towards the end of last week and started Friday Much higher. Then it sold off quite a bit – still up on the day, but well off the highs. This spread assumes that we don’t revisit the 170 level, over $10 away. With earnings behind us, IV and HV should continue to decline a bit. Two expirations provided, pick the one you like more from a risk/reward perspective – note that the latter obviously provides more time for DIS to dip (and you are compensated for that).
TTWO had a rough post-earnings move and this trade assumes TTWO doesn’t make new 52 week lows.
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8/16/2021 Entry:
Sold TTWO Sept 17 150/145 put spread for 0.72. Sold DIS Sept 3 170/165 for 0.49. Note 1 week earlier than planned. Can also wait for DIS to stabilize as it is down a bit more than the market. Also once can stick with the original expiration and take in more premium.
8/21/2021 Update:
With the market down for much of the week, the DIS put spreads also moved against us and are now worth 0.67 at the mid point. I’m leaving as is for the time being, with no planned management this week. An exception would be another sell-off with a close below our short strike (170) at which point I may just take the loss if there is no ability to roll.
The TTWO put spreads are profitable, now worth 0.60. No action planned this week as we try to capture more premium.
8/28/2021 Update:
Disney came back this week and our put spreads are worth only 0.04 at the midpoint. They expire this week, so make sure to take action on them before Friday’s expiration if DIS is trading anywhere near the short strike A fine move is to simply try and close them earlier in the week for 0.04 to 0.05 to take the risk off and book the win.
TTWO put spreads are down to 0.38, increasing our profit on the trade. We’re at about 50% right now and I’ll be leaving it on to go for more. If TTWO takes a dive below 155, I would consider scrapping the trade for a small profit or small loss.
9/4/2021 Update/Partial Close:
The DIS put spreads expired worthless. $49 profit per spread sold, or $98 for those sizing a $25k account and keeping risk under 5%/trade. What to do with that $? I’d recommend buying a year subscription to Disney+ and you’ll still have money left over. All trades ideas are for educational purposes only, of course, but Disney+ for $80 is a full recommendation!
The TTWO put spreads are now worth 0.23 at the mid point, meaning we are sitting on almost $50 profit per spread sold. With 2 weeks left, I plan to sit on them a while longer. If TTWO sells off a lot, I would consider taking it off for break even.
9/11/2021 Update:
TTWO had a drop on Friday and the put spreads are now worth 0.60. We are still profitable on this trade, but not by a lot. Expiration is this week and we’ll likely have to take some action. The first choice is to simply close at the open on Monday and book the small win (assuming there isn’t a gap down). The next is to see how the market is performing. If there is a move up, we can be a bit more patient and try and collect some more decay. The next choice is to simply leave it on until expiration to try and collect all the premium or accept the chance of a larger loss. This last option (my personal plan) is definitely a more volatile play for your account balance, so please keep that in mind and close earlier if you don’t want the additional risk.
9/19/2021 Close:
The TTWO puts expired worthless on Friday. A bit of a volatile trade, but can’t complain about the result – a $72 win per spread sold.
