DIS seems to have made nice with DeSantis so also good for the Butterfly and LTP again.
In the LTP, let’s:
- Sell 15 DIS 2026 $100 puts for $10.25 ($15,375)
- Buy 25 DIS 2026 $90 calls for $23.10 ($57,750)
- Sell 20 DIS 2026 $120 calls for $9 ($18,000)
That’s net $24,375 on the $75,000 spread that’s $25,000 in the money to start so we’re capturing 100% of any move over $100 with $50,625 (207%) upside potential over 18 months and, of course, we’ll look to sell some short-term calls as the stock recovers. At the moment, the Sept (106 days) $105 calls are $4.15 so we could sell 10 for $4,150 and that’s 17% of our outlay but hopefully we can get that for the $115s as DIS moves back up – so we’ll wait a while.
Keep in mind DIS is in a heavy investment phases so we don’t expect a big move up but last earnings were a 10% beat despite in-line revenues. I don’t think of this as a 2-year play, we’ll certainly add more and roll if they go lower.
For the Butterfly Portfolio:
- Sell 10 DIS 2026 $100 puts for $10.25 ($10,250)
- Buy 20 DIS 2026 $110 calls for $12.50 ($25,000)
- Sell 15 DIS 2026 $130 calls for $6.30 ($9,450)
- Sell 7 DIS Sept $105 calls for $4.15 ($2,905)
- Sell 5 DIS Sept $100 puts for $4.10 ($2,050)
That’s net $345 on the $40,000 spread and, if we are lucky enough to thread the needle on the short-term shorts (if not, we roll the loser and sell more next Q) then any additional sales (5 Qs left) are all profit and we still get the net of the spread – love it!
