Disney's Streaming Switch Brings Out the Bulls

With theme parks closed until further notice, the media giant is shifting focus

Deputy Editor
Oct 13, 2020 at 12:28 PM
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To say that coronavirus has made its mark on blue-chip company Walt Disney Co (NYSE:DIS) would be an understatement. The entertainment concern has been contending with theme park closures and layoffs for months now, and with no clear end to the pandemic in sight, there's no telling when the most magical place on earth will be able to resume normal operations.

Now, it seems Disney is shifting its focus from shuttered theme parks to one of its newer ventures -- streaming. The company announced on Monday that it was revamping its media and entertainment businesses in an attempt to rapidly grow Disney+ and its other streaming services.

In response, DIS is surging, up 4.1% at $130.13 -- poised for its highest close in almost a month. The security just recaptured its 20-day moving average, too, after weeks of being rejected by the trendline. The stock still sports a 9.9% year-to-date deficit, however, though it has managed to climb 22.8% in the last six-month period. 

DIS Chart Oct 13

The restructuring announcement has options players in a frenzy, too. So far, 202,000 calls and 44,000 puts have crossed the tape -- five times the intraday average, with call volume running in the 98th percentile of its annual range. The two most popular positions by far are the monthly October 131 and 130 calls, with positions currently being opened at the latter. This suggests these traders are betting on the $131 level as a floor for the underlying stock by the time these contracts expire this Friday, Oct. 16. 


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