Earnings season has begun and one sector we highlight is Consumer Discretionary where we hold a moderate overall view. We anticipate an increase in business spending as well as consumer spending. We expect to see some moderate rotation into this sector in the coming months. Options trading investors can profit with the right stock.

Dish Network Corporation (NASDAQ: DISH) through its subsidiaries provides direct broadcast satellite subscription television service in the United States.

DISH is trading around $23.47. We see the 50- and 200-day moving averages increasing along with implied option volatility for the May options heading into earnings. Our outlook is moderate and we would add some exposure by selling the DISH May 22 Puts at this time.

With DISH trading at $23.50, the investor selling the May 22 puts could collect .65 cents. If at May expiration the stock finishes above the 22 strike price the puts will finish out-of-the-money and the investor will retain the premium.

The break even for this trade would be the difference between the strike price minus the premium or $21.35 (May 22 Put – .65 = 22 – .65 = $21.35).

As the seller in this strategy, the investor would have the obligation to purchase DISH if the stock price is lower than the strike price at expiration. With the stock at the current level of 23.50 we are willing to sell the May 22 puts and collect the premium.

Stutland Equities is a premier futures and options trading company on the Chicago Board Options Exchange. Founded in 2005 and headquartered in Chicago, Stutland Equities specializes in volatility arbitrage across multiple asset classes.