Dan Nathan's Disney Trade

On CNBC's Fast Money, Dan Nathan recommended a bearish options strategy in Walt Disney Co DIS. The company is reporting earnings next week and implied move in the options market is 3 percent. The stock doesn't usually move a lot on earnings, only 1.7 percent. Nathan believes that the stock is expensive because it is trading at 21 times 2015 earnings and it is supposed to grow sales 8 percent. He would only consider a short-term trade and he doesn't want to step in front of Walt Disney Co's super cycle in movies. Specifically, Nathan would buy the February 92.50 put for $2.10 and sell the February 87.50 put for $0.60, paying $1.50 for the spread. This sets breakeven at $91. His maximal risk is $1.50 and he can gain $3.50 for the trade.