The Walt Disney Company (DIS) Call Buyers React to Star Wars Buzz

The trailer for Walt Disney Co's (DIS) new Star Wars movie has everyone talking -- and some buying calls


Published on Apr 20, 2015 at 2:07 PM
Updated on Apr 20, 2015 at 5:32 PM

Walt Disney Co (NYSE:DIS) is 1.3% higher today at $108.06, as buzz continues to spread over the recently released trailer for Star Wars: The Force Awakens. In fact, the video already has over 66 million views on YouTube. Options traders are apparently excited, too, as call volume is running at nearly double what's usually seen at this point in the day. One contract seeing a lot of action is the weekly 4/24 108-strike call, which it appears traders are buying to open. By doing so, they expect DIS to extend its lead above $108 by the close this Friday, when the options expire.

Call buying has been hot in the security's options pits for a while now. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), DIS has accumulated a 50-day call/put volume ratio of 2.61, which is only 2 percentage points from an annual bullish peak.

That's not to say everyone is bullish on DIS, though. The 42 million DIS shares controlled by short sellers represent over seven sessions' worth of trading, at average daily volumes. Plus, 10 of 22 analysts maintain tepid "hold" ratings on the stock, while its average 12-month price target of $108.12 sits roughly in line with today's price. A reversal of any of these pessimistic stances could spell additional tailwinds for the stock.

Walt Disney Co (NYSE:DIS) has already been a technical standout this year, adding 20% since its 2015 low of $90.06 on Feb. 2. What's more, DIS has outperformed the broader S&P 500 Index (SPX) by 11 percentage points during the past three months, and hit an all-time high of $108.94 late last month.

Daily chart of DIS since January 2015

A Schaeffer's exclusive!

The Expert's Guide

Access your FREE trading earning announcements before it's too late!



NEW! Explore Schaeffer’s Partners' deals and get connected to top online brokerages with deals tailored exclusively for our readers.  Get answers to your questions regarding transfer fees, commission rates, programs and available discounts related to online trading services.

MORE | MARKETstories

The Nevada Discovery That Could Jeopardize Chinese Dominance
Click to continue to advertiser's site.
Zoom Stock Brushes Off Senate Warning
The U.S. Senate just warned its members against using Zoom as a video chat platform
Costco Stock Dips on Bear Note
Deutsche Bank cut its price target to $295 from $300
The Top Lithium Play of 2020
Click to continue to advertiser's site.