I wrote a put on Disney (DIS) on Tuesday.
music selection: “Rain When I Die” — Alice in Chains
Recent volatility was plumping up options premiums so it seemed like a good time to get into the maker of Star Wars.
I sold DIS160219P00095000 for 2.30 a contract. The trade will be in force for 46 days and earns 19.21% annualized. The near the money strike was offering 30.95% annualized but I opted for more downside protection. This market remains guilty until proven innocent. Versus a spot price of 100.28 at the time the contract was written, the trade has 7.56% downside protection. That would be an enormous move for a mega cap that experiencing positive news.
Dupont has moved slightly against me. I’ll be monitoring the situation and may roll the position down and out on Friday (expiry day).
Devour your prey raptors!