Trade Findings and Adjustments 04-9-2019
DIS – What could be a good chance for Disney stock to keep moving up?
– Technically due for a break out as it has broken the $115 resistance and wedge pattern chart
– Movies this summer… Most importantly Avengers Endgame in May.
– Streaming content with Disney +
– Pre-earnings run for May 8th report.
Option A:
May 24th $116 – 120 strike Bull Call
116 Long Call at 4.45
120 Short Call at 2.45
Cost: $2.00
Reward: $2.00
117.92 breakeven.
Easy to adjust if it goes the wrong way
An alternative:
Option B:
Jan 2020
$120 Strike Leap Long Call for $7
Lots of time for potential profit
Another alternative:
Option C:
May monthly 110 – 105 Bull Put
110 Short Put
105 Long Put
for .66 credit with a BIG buffer below current price of $116.60ish
You are risking more money for a smaller return, but has a high probability of profit.
Hard to adjust if it goes the wrong way.
I prefer options A and B because I like knowing that I can take it off if it goes the right way very quickly. Option C as a credit spread,
requires time decay over the next month in order to make money, and puts you at risk of a news event ruining the trade during that time.
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