DIS Pops on Disneyland Reopening Announcement

DIS is up over 70% year-over-year

Assistant Editor
Mar 8, 2021 at 9:51 AM
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The shares of Walt Disney Co. (NYSE:DIS) are up 2.7% to trade at $189.99, after California officials gave the theme park operator the go ahead to reopen Disneyland. The park has been closed for more than a year, but is now cleared to open at reduced capacity starting April 1. Separately, the company's film "Raya and the Last Dragon" earned $8.6 million in ticket sales, topping the weekend box office charts despite Cinemark (CNK) declining to screen the film.  

Digging deeper, Walt Disney stock notched a record high of $200.60 on Feb. 24. The equity has been trading lower on the charts since then, and the 10-day moving average has acted as a layer of resistance for three-consecutive sessions now, though today's pop put the equity well above this trendline. Plus, year-over-year DIS is up 70.9%.

The options pits, meanwhile, are firmly in the bullish camp. This is per the stock's 10-day call/put volume ratio of 3.32 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which stands higher than 81% of readings from the past year. This means calls are being picked up at a faster-than-usual pace. 

Now seems like a good opportunity to weigh in on the stock's next move with options, as its Schaeffer's Volatility Index (SVI) of 34% sits higher than just 9% of all other readings in its annual range. This suggests options players are pricing in relatively low volatility expectations at the moment. Plus, Walt Disney stock's Schaeffer's Volatility Scorecard (SVS) sits at 81 (out of a possible 100), meaning the shares have regularly made bigger moves than options traders were pricing in during the last 12 months.

And already today, options are flying off the shelves. So far, 31,000 calls and 5,638 puts have crossed the tape -- double the intraday average. The weekly 3/12 200-strike call is the most popular, followed by the 195-strike call in the same series, with positions being opened at both. 

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