Market Overview

Brian Stutland's Walt Disney Trade


On CNBC's Options Action, Brian Stutland shared his bullish options trade for Walt Disney Co (NYSE: DIS) ahead of earnings next week.

He thinks that the company is going to post good earnings results because it has a great movie line-up. It is also in a good position to benefit from cheap oil prices, because consumers have more money in their pockets. Stutland added that Disney had a 40 percent year-over-year growth and its price to earnings ratio of 25 is not totally ridiculously.

Stutland wants to buy the August 28 expiry, 120 strike call for $2.70 and sell the August 28 expiry, 125 strike call for $0.80. The call spread would cost him $1.90 and the trade is going to be profitable if the stock trades above $121.90 at the August 28 expiry. The profit is capped at $3.10.


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