Disney (DIS) has not really cooperated since day one. We thought we had an opportunity to scalp some money off the options early. Unfortunately, it moved against us with the market, then each adjustment has moved beyond the adjustment point as well with whipsaws in both directions.
We have also heard that some of you have been assigned on the short put at the 23 Dec 97 strike.
This is a two-part instruction depending on whether you were assigned or not.
TRADE CLOSE 1
IF YOU WERE ASSIGNED DIS 23 Dec 97 Put
TRADE ACTION 1: Exercise the DIS 23 Dec 92 put that will close the put side of the position. It will close your long put and closeout the stock position as well. DIS Is down a little premarket and you may have a slight profit on the 92 put.
You can then either close the call side for a few pennies of net debit or let it expire worthless.
The second part of the trade is for those of us that have not been assigned.
Disney (DIS): 87.18
TRADE ACTION 1: CLOSE the entire DIS iron butterfly for a debit of around 5.00. Do not spend more than five on it, that’s all it is worth.
BTC the DIS 23 Dec the 97 put
STC the DIS 23 Dec the 92 put
BTC the DIS 23 Dec the 97 call
STC the DIS 23 Dec the 102 call
At this point we are electing not to further adjust the trade. We see better opportunities and uses for the capital. Unfortunately, this trade results in about a $2000 to $2500 loss depending on your entry and exit points.
Be on the lookout for further alerts today through the end of the week.