UPDATE 2.8.2012 I did not like the way that Disney was acting last night, so I was happy that it got a POP today. This was a one day trade for me, like most earnings are. I sold this spread out for $.86 and paid $.72, so that is good for a 20% gain overnight. Taking profits and moving on to the next trade.
They should benefit from an economic recovery even though the ESPN viewer-ship from the BCS games has been down year over year, I think Disney will beat on earnings and climb higher. There is a 5% implied move and Disney has moved over 6% on each of the last 4 quarters.
In the options front, Calls have out traded the Puts on a 3 x 1 ratio. In this strategy I want to buy the March 41-43 Call Spread for $.70. I usually like to trade the front month options, but with the volatility being so cheap the March Call Spread is only $.10 higher than the Feb Call Spread and it gets me an extra 4 weeks of time. This spread can be worth $2 giving me a 2×1 risk vs reward payout.