We were called out of our Walt Disney (DIS) shares last week, incurring a large net debit.
The stock is up around 7% since the company reported a positive earnings surprise thanks to better-than-expected streaming subscriber numbers for its Disney+ service.
Management did reduce its 2024 subscriber guidance, but new price hikes across its various streaming services could help the company hit its 2024 streaming profitability target.
I am recommending we sell a close-to-the-money put. Given the upside potential I see in the stock, I plan to accept shares if they are in the money at next week’s expiration and return to selling calls so we can generate income as well as capitalize on potential appreciation.
You can enter today’s trade even if you were not in the previous one. Just be aware that we will be managing and tracking it based on the ongoing position.
Current Stock Price: $120.76
Current Net Debit: $17.36
Action: Sell to open the DIS Aug Monthly (8/19) 120 Put for around $1.54, but adjust as needed to sell a put today
New Net Debit: $15.82