Most Active Options: Netflix, Inc. and Walt Disney Co

Front-month put options are popular today on Netflix, Inc. (NASDAQ:NFLX) and Walt Disney Co (NYSE:DIS)

May 19, 2016 at 2:13 PM
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The 20 stocks listed in the table below have attracted the highest options volume during the past 10 trading days. Stocks highlighted are new to the list since the last time the study was run, and data is courtesy of Schaeffer's Senior Quantitative Analyst Rocky White. Two notable names are entertainment stocks Netflix, Inc. (NASDAQ:NFLX) and Walt Disney Co (NYSE:DIS).

most active options may 19

NFLX and DIS are in the headlines today, after Disney CEO Bob Iger said it's "unclear" whether the company will continue to sell content to third-party distributors like Netflix. In the options pits, it looks like traders are buying to open NFLX's at-the-money May 89 put, counting on the stock to breach the strike by Friday's close, when the front-month series expires.

This is business as usual for options traders. During the last two weeks, speculators have bought to open 1.14 NFLX puts for each call at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) -- a reading that ranks in the high 97th annual percentile. On the flip side, analysts are tilted in a bullish direction, with 16 of 27 handing out "buy" or better endorsements.

Netflix, Inc.'s technical performance appears to favor the doubters. The stock is down 0.9% today at $89.68, bringing its year-to-date loss close to 22%. A continuation in this trend could spell danger from a contrarian standpoint, as it may trigger a round of bearish analyst notes.

DIS is off today, too, down 0.5% at $98.50. Meanwhile, the stock's put options are trading at 1.2 times the usual intraday rate, with the May 98 strike in the lead. Based on ISE data, some traders are selling to close these positions to lock in paper profits ahead of expiration tomorrow night. On the other hand, option bulls have seemingly been buying the in-the-money May 98 call, expecting a rebound through week's end.

From a longer-term perspective, call buyers have been busy betting on DIS. The stock's 50-day ISE/CBOE/PHLX call/put volume ratio checks in at 1.54, in the 78th percentile of its annual range. In other words, options traders have been buying to open calls over puts at an accelerated clip in recent months.

Technically speaking, Walt Disney Co has been a mixed bag. On the positive side, the stock has come a long way since bottoming at an annual low of $86.25 on Feb. 10. On the other, the shares were recently rejected by their year-to-date breakeven mark, and are now struggling to maintain their foothold atop the 100-day moving average.

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