On Friday’s Options Action, the crew analyzed the performance of Disney (DIS) stock. Disney has underperformed the broader market for almost 3 years but has started to come to life over the past few weeks. It recently completed two bullish patterns, an inverted Head & Shoulders, and a cup and handle formation, providing a bullish setup. Coupled with cheap valuation and trading near all-time highs suggests a possible breakout higher on earnings. With an elevated implied volatility, Michael Khouw suggests selling an Aug/Oct 115 Call Calendar for a $1.80 Debit. As of Friday’s close, this spread is trading at $1.85.
We’ve structured this trade in OptionsPlay so you can analyze and view this trade along with the supporting technical chart at your convenience. You can also view the Options Action’s video by clicking on the following link: DIS Options Action