Keene calls Disney "over-sold," and sees shares of the media giant heading back to the $100 level the stock saw in July. Disney did trade up to $104 in May, but Keene doesn't see it going that high — he has his eyes on hitting $100 in January as his "measured move" target.
"We saw a lot of resistance at $100, but this is where I think it's headed in January," Keene said.
In order to capitalize on such a move, Keene buys the January 97.50-strike call and sells the January 100-strike call spread for a total cost of $0.50 per share, or $50 per options contract.
If Disney shares close at or above $100 on January 20, this spread will be worth $2.50 — five times his original investment. That would represent an 8 percent rally from Wednesday's opening price.
On the other hand, if Disney shares don't manage to rise, his trade will expire worthless.
"If it does sell off on earnings, I still think it can go higher," Keene said.
Trader takeaway: Andrew Keene is bullish on Disney ahead of earnings, and is buying the January 97.50/100 call spread in order to play for a rally up to $100.