Call options are incredibly popular today
The shares of Walt Disney Co (NYSE:DIS) are up 6.3% to trade at $116.15 today, after the company announced a small part of its U.S. theme park landscape will reopen on Wednesday with sanitary policies and social distancing rules in place. Disney Springs, a shopping and entertainment complex that is part of the Walt Disney World theme park, will open a small selection of its 104 stores and 64 eating establishments, all operated by third parties, on May 20. According to a report,customers will have their temperature taken before entering, entrants over three years of age must wear a face mask, and normal hours of operation will be modified.
On the charts, Disney stock is seeing its rally run out of steam at its 100-day moving average. While the shares have distanced themselves from their mid March low of $79.07, it is worth noting that Disney is still staring at a 19.8% year-to-date deficit.
Analysts are divided on where they stand with Disney stock. Of the eighteen in coverage, ten consider it a "buy" or better, with the rest saying "hold." Meanwhile, the consensus 12-month price target of $123.56 sits at a 6.3% premium to current levels.
Options players also want a slice of the cake. So far, 199,000 calls and 102,000 puts have crossed the tape, more than double the intraday average. The most popular position is the weekly 5/22 120-strike call, where new positions are also being opened. New positions are also opening at the weekly 5/22 125-strike call, implying traders are expecting more upside for the underlying stock by the time these contracts expire this Friday, May 22.
In the options pits, traders seem to be a little more favorable of puts lately. This is per DIS's 50-day put/call volume ratio of 1.30 at the International Securities Exchange (ISE), Cboe Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which sits in the elevated 96th percentile of its annual range. Furthermore, Disney's Schaeffer's put/call open interest ratio (SOIR) of 1.27 is higher than 85% of all other readings from the last year, implying short-term options traders have rarely been more put-biased.