Short-Term Call Traders Target Disney, Twitter Stocks

Disney's new Toy Story movie opened no. 1 at the box office -- but that wasn't enough

Jun 24, 2019 at 12:16 PM
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Two names that just popped up on a list of stocks that have seen the most weekly options activity in the past 10 days, according to Schaeffer's Senior Quantitative Analyst Rocky White, are Walt Disney Co (NYSE:DIS) and Twitter Inc (NYSE:TWTR). We'll dig into DIS and TWTR shares to see how traders are positioning themselves.

most active options june 24

Disney stock is in focus today after the company's new "Toy Story 4" movie failed to live up to what many were expecting for its first weekend at the box office, bringing in just under $120 million in domestic ticket sales. The blue chip is trading down 1.5% today at $138.13, and weekly options are popular again, with new positions opening at the weekly 6/28 140-strike call, today's most-traded contract.

Data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows a heavy call preference during the past 10 days, with the two-week call/put volume ratio of 5.69 ranking in the 99th annual percentile. The June 145 call saw heavy trading during this time frame, as well as the the July 145 call, where tons of buy-to-open activity took place.

As for TWTR, we've been watching the stock as it's testing its historically bullish 80-day moving average, with the shares last seen trading at $35.31. Sure enough, weekly calls are popular today, thanks to heavy trading at the 7/12 33-strike call. During the past 10 days, it was the 6/28 34-strike call that saw the largest increase in open interest.

Overall, open interest on Twitter is now near annual lows, after massive expiration in the June series, specifically at the 37 and 38 calls. According to our Schaeffer's Volatility Index (SVI) of 35%, it's a good time to target short-term options, since this reading ranks in the low 6th annual percentile, showing unusually low volatility expectations around TWTR options.

 

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