The Walt Disney Company (DIS) Rises, Call Buyers Slide In

Walt Disney Co (NYSE:DIS) hosts its annual shareholder meeting today


Published on Mar 12, 2015 at 12:29 PM
Updated on Apr 20, 2015 at 5:32 PM

Walt Disney Co (NYSE:DIS) is leading the Dow higher this afternoon, up 2.7% at $105.62 -- the best blue-chip performance thus far -- ahead of today's shareholder meeting. As such, DIS calls are hot today, trading at twice the average intraday pace. In fact, today's call volume of roughly 20,000 contracts is higher than 97% of all other readings from the past year. Speculators are targeting the March 106 call, the equity's most popular contract. It appears new positions are being initiated here, as traders bet on the shares to eclipse $106 by next Friday's close, when front-month options expire.

Speculators preferring calls over puts has been the case for a while now in DIS' options pits. Looking at data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows a call/put volume ratio of 1.72 over the last 10 weeks, ranking in the 70th annual percentile. This means calls have been bought to open over puts at a faster-than-usual rate.

What's more, the security's Schaeffer's put/call open interest ratio (SOIR) comes in at 0.60 -- in the 22nd percentile of its annual range. In short, call open interest outstrips put open interest by a wider margin than usual, among options expiring in the next three months.

While it seems speculators are behind the stock, analysts are divided. Twelve brokerage firms tracking the shares deem them a "buy" or better, yet 11 others say DIS is a "hold." Moreover, the security's intraday high of $105.96 is greater than its average 12-month price target of $105.88.

Walt Disney Co (NYSE:DIS) has performed excellently in 2015, as the shares were buoyed by a strong showing in the earnings confessional early last month. All in all, DIS has gained 12.2% year-to-date.

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