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

Digital Content Group
Apr 20, 2015 at 2:07 PM
facebook twitter linkedin


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

Grab your FREE Eternal Contrarian report!


 




 
Special Offers from Schaeffer's Trading Partners