Carter Worth And Mike Khouw's Disney Options Trade Ahead Of Earnings

On CNBC's "Options Action," Carter Worth analyzed Walt Disney Co DIS from a technical standpoint. He noticed the stock moved up with two gaps and then it consolidated for some time. This setup usually resolves in a direction of a primary move, said Worth.

A recent break out above the important resistance of $152 is another bullish sign for Worth. He expects the stock to continue to move higher.

Disney is scheduled to report earnings Thursday and Mike Khouw noticed the options market is implying a move of 6% in either direction, while the average move for the event is 3%. He wants to take advantage of elevated options prices and sell the March $180/$160 put spread for a net credit of $6.30. The trade breaks even at $173.70 and it can maximally lose $13.70.