10/10/2021 Plan:
This week we look at Disney (Ticker: DIS)
10/10/2021 Plan (continued):
- DIS – Sell the Oct 22nd 170/165 put spread for 0.51 OR
- DIS – Sell the Oct 29th 170/165 put spread for 0.72
- ATVI – Sell the Oct 29th 73 put for 0.60
- Prices are as of market close 10/8/2021, 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
10/10/2021 Commentary:
Disney has been moving around quite a bit (look at the big jump up in historical volatility), but implied remains more expensive, so we look to sell some put spreads in the name. Two different timeframes depending on your risk/reward preferences. The trade assumes the 170 level holds for a couple weeks.
For the ATVI put sale, only consider it if you are willing to take shares, otherwise skip or buy a lower strike to make it into a spread. I’m bullish on video game makers over the long run and would be willing to take shares at this level.
Feel free to Reach out with questions on this or anything else!
10/11/2021 Entry:
Sold DIS 10/22 170/165 put spread for 0.49. Also 10/29 available for 0.74 (sold one to watch it). Sold ATVI 10/29 73 put for 0.61. Closed TWTR put spreads for 0.03 – nice quick win!
10/16/2021 Update:
The DIS put spreads are performing well with the Oct 22 version worth only 0.18 and the Oct 29 worth 0.46. I intend to keep this week’s on to Thursday or Friday. If they are safely OTM on Friday, I’ll let them expire worthless, otherwise I’ll look for a close around mid-day.
ATVI – the put we sold is now worth 0.43 at the mid-point. I’ll be holding to try and capture more decay.
10/24/2021 Update:
With Disney closing at 169.42 the spreads were worth 0.58 at expiration, for a loss of 0.09/spread. I ended up rolling on Friday for an additional 0.31 credit to the Nov 5th expiration and the 167.5/162.5 strikes. We will use this space to follow along on that spread. Taking a small loss was certainly an ok approach – I remain bullish on DIS which is why I decided to extend it (and put a bit more credit in my pocket for the time being) . For record keeping, it was bought back at 1.17 (so a $68 loss per spread) and re-opened at $1.48. If you aren’t used to rolling and how the math works, please do reach out and I would be happy to clarify.
The ATVI put we sold is worth 0.09 – I’m closing at this level to free up some margin to sell other puts. You can leave it on if you’d like to capture a bit more decay or close it.
10/31/2021 Update:
Our Disney put spreads expire this week. Disney closed near 169 on Friday and there is still another dollar and a half before it reaches our short strike. As a reminder, earnings is next week which is a source of volatility. If you decide to roll the spread at the end of the week, take that into account. I will likely close on Thursday or Friday.
The ATVI puts expired worthless if you held on, or if you closed them early in the week as I did you booked a very nice profit earlier in the week – anywhere from $52 to $61 per put sold.
11/7/2021 Close:
Disney was range-bound for the week until Friday when it had a quite nice pop to end over $175/share which made our put spreads quite safe and they expired worthless. That is an almost $300 profit! ($148/spread * 2 spreads = $296). That will almost cover 3 day passes at a Disney World resort – or almost 4 years of their Disney Plus service (which I do recommend!).
