Comcast Defeat Sparks Heavy Disney Options Volume

DIS stock is on track for its longest winning streak since 2013

Jul 19, 2018 at 12:28 PM
facebook twitter linkedin


The shares of Walt Disney Co (NYSE:DIS) are trading higher today, after Comcast (CMCSA) withdrew its bid for Twenty-First Century Fox's (FOXA) entertainment assets,  leaving Disney as the likely buyer of the Fox assets. At last check, DIS stock is up 3.1% at $114.13 -- fresh off an annual high of $114.68, and on track for its longest daily win streak since September 2013.

Disney's options pits are buzzing, too, with roughly 56,000 calls and 20,000 puts on the tape -- three times what's typically seen, and total volume pacing in the 97th annual percentile. Most active is the September 120 call, where it looks like buyers are initiating positions for a volume-weighted average price of $1.28. If this is the case, breakeven at September options expiration is $121.28 (strike plus premium paid), a level not surpassed in nearly three years.

This accelerated call volume just echoes the recent trend seen from DIS options traders. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the equity's 10-day call/put volume ratio of 2.18 ranks in the 80th annual percentile, meaning calls have been bought to open over puts at a quicker-than-usual clip.

Looking closer at the charts, Disney's recent rally was initially sparked by a sharp bounce off the stock's 200-day moving average back on July 3. The shares are now pacing for their best month since October 2015, up 9.1% so far. Year-to-date, DIS has added 6.4%.


A Schaeffer's exclusive!

The Expert's Guide

Access your FREE trading earnings guide for Q3 before it's too late!


  
 
Special Offers from Schaeffer's Trading Partners