On CNBC’s “Alternatives Action,” Tony Zhang implied that investors must think about a Bearish alternative trade in Walt Disney Co (NYSE: DIS).
The business will report earnings on Tuesday and Zhang believes risks are skewed to the downside.
He’s worried about Disney’s poor comparative power to Communication Services Select Sector SPDR Fund (XLC) and comparatively weak advice from analysts.
Zhang hopes to find a substantial decrease from the theme park earnings and soft amounts from the studios and media section. Disney+ is the only region of the company that’s growing, but its numbers for 2Q aren’t too appealing, clarified Zhang.
To earn a Bearish commerce, Zhang would like to get the August $115/$105 set spread for a entire price of $2.90. The transaction breaks at $112.10 or 4.14% under the present stock price. When the stock falls to $105 or reduced, the transaction will achieve its maximum benefit of $7.10.
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