Walt Disney & Bitcoin Insight: Weekly Report Nov 3rd

Weekly Report Nov 2nd

So the markets loved what Jerome Powell, Fed Chairman, had to say after the Fed meeting and taken it that the Fed are going to be done with raising rates. That’s it, they’re finished. And consequently, we saw. A collapse in bond yields, 30 years now back close to 4.75%! And the stock market went, parabolic once people had digested the information.

However, focusing on next week, coming towards the end of earnings season One of the ones that I wanted to look at is Walt Disney, The House of Mouse.
A lot of analysts liking, the stock, with some very high upside targets, which I’m not too sure about, but okay, going for that, going for an upside target from where we are now, it could conceivably have a challenge to the $112 area, a previous line of support. Fairly bullish, if that’s the case, and it could easily get dragged up with the rest of the market and with good earnings and maybe a positive box office from the Marvels could quite conceivably get back up there.

I want also though to give it a bit of time So. I went for a March 24 expiration, and I asked Big Boy what were the best trades to do.
And it came up with some very plain old vanilla stuff, and it suggested the 105 call. Just buy those. It’s, cheap. at $1.18 (at time of writing) for that, that call, going out that far, I think is a worthwhile punt. You could buy 84 of those for your thousand bucks. And as you can see here, will monetize very quickly if we do rally early and even if it grinds higher, a lot of green there. So that’s good.
The only other one if you’re not wanting to pay out a $1.18 was the 105/115 call spread(bull spread) . That was the one that big boy actually liked the most. And you’d be paying only 77 cents for that. , as you can see here again, less of an outlay. So it’s a good trade. , And it’s also in its 22nd percentile. Looking back historically, that kind of like equivalent out the money option.
So, you know, if you want to have a swing for the fences, just buy the 105 call. If you don’t mind the premium outlay. If you want less of an outlay, don’t want to, you know, risk too much. 77 cents to buy the 105/115 call spread is a good upside trade.

However. , going back to my previous point, Marvel is not looking the strongest, are they? All the stuff that has been coming out this week, has not been positive news for Disney (even if the new Echo trailer looks kinda kick-ass) . When they’re talking about a complete overhaul or restructuring or bringing back the old Avengers. , then things sound like they’re not going well. This phase has not been the best and so it is possible that it could, you know, carry on going down.
We are actually on multi year lows already. Uh, but if you’re still bearish and I had to look back to 2011 ish for the most likely downside target I could see and if the numbers, correspond with the kind of news we’ve seen this week I would look to target around the 64 buck area.
And so the trade that big boy liked or that I like out of this, it wasn’t necessarily it’s his favorite, you know, it wasn’t the top trade, but it’s in the top four that he picked, but I like this one.
It’s a put condor. It’s a 55/60/65/70 put condor. Again, monetize is pretty quick if we go down on the back of bad numbers, uh, but you’ve got a fairly good landing area. iT’s in the middle of the road historically as to where it’s been, but you know, I think that’s an okay trade if you want to play the downside.
And looking at the skews, it’s probably the way the market seems to be implying anyway.

Next up, Bitcoin. , you may… Or may not have seen that rally to the moon this week which I guess is because bitcoin has become a bit of a safe haven alternative to gold but anyway, we are back in the mid 30s and given the power of this rally, I could see it may be continuing a run up to the 50 000 area.
I want to give myself a bit of time. I want to see a rally into the year end to get to that target. So if that’s the case, I’m looking at January expiration and the trade that big boy liked that I picked out of its top five, was the 47,000/48,000 call spread (bull spread) which again monetizes really quickly and is a great risk reward trade. You’re only losing your premium you lay out. The price, although it seems high, remember that all big boy calculations are done based on $1, 000 of investment so although you’re looking at an entry price of $113. 78, but you just buy 18 contracts. The point is the percentage return on your investment and there, if it’s right, if it rallies to your target, you know, you’re looking at 572% return on your $1000, which is obviously not bad.

Finally this week, we’re going to have a look at the stock market, which bounced off. It’s last line of support.
It was really looking weak and it would not have done well if rates were to continue to rise. But, , they did not. We bounced and we bounced pretty hard. Although still in a downward channel, if we break out to the upside, we will probably have another challenge at the highs. So, what I wanted to do here was target 40 days out around the December expiration I went with a very top trade here. A 489% return in 40 days. If you buy the 4570/4590 call spread, again, monetizes very quickly. May have missed the early boat there, but go with the trend if that’s what you like. It’s in its sixth percentile (Relative Value on a constant maturity basis), which means it’s pretty low. And so just because the wings are trading higher than the lower, the next strike down. So because the smaller Delta options are so high, the call spreads are relatively cheap and you should take advantage of that by buying the call spreads if you like that upside play.
So just recapping, for the stocks (S&P specifically), we like the 4570/ 4590 call spread , getting that in and that a $1.60 , 125 times,
for Bitcoin, the 47000/48000 call spread, paying $113.78 on 18 contracts.
And then Disney, if you like, the upside, just by the 105 calls paying a $1.18 & if you don’t wanna pay as much premium, pay 77 cents to buy the 105/115 call spread.
And if. If you don’t like Disney and you think they’re all going to go to hell, , then buy a Put Condor, for a March 2024 expiration and next year paying 75 cents for 128 of those and you’ll be laughing all the way to the bank.