Disney Stock Hits Record High as Avengers Assemble

Disney's "Avengers: Endgame" is expected to shatter box offices this weekend

by Patrick Martin

Published on Apr 23, 2019 at 10:02 AM

The shares of Walt Disney Co (NYSE:DIS) are up 1.9% to trade at $134.16 this morning, and earlier nabbed a fresh record high of $134.23, getting a boost ahead of this week's premier of "Avengers: Endgame," the final chapter of the movie industry's highest-grossing franchise of all time. The movie is a contender to shatter the opening weekend domestic record set by the series' preceding film "Infinity War." 

Disney stock gapped higher earlier this month after releasing details surrounding its new streaming platform, Disney+. DIS has logged four straight weekly wins, and has now extended its 2019 gain to 22.2%. Plus, the $130 region appears to have emerged as newfound support, a level that coincides with the stock's April 12 bear gap peak.

Shorts have been scurrying for the exits, which has likely created bigger tailwinds for DIS. Short interest plunged by 67% in the most recent reporting period to 13.98 million shares -- the lowest in at least 17 years -- and now accounts for less than 1% of the security's total available float.

In the options pits, DIS' Schaeffer's put/call open interest ratio (SOIR) of 0.57 reveals a huge tilt to near-term calls over puts. This reading ranks in the bottom annual percentile, too, meaning such a call-skew is quite rare.

Those wanting to speculate on the Dow stock's short-term trajectory may want to consider an options-buying strategy. The equity's Schaeffer's Volatility Index (SVI) of 21% ranks in the 23rd percentile of its annual range. In other words, volatility expectations appear low, suggesting it's an attractive time to purchase short-term options premium.

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