Disney saw a hit after winning May 14 thanks to disappointing subscriber growth for its Disney + streaming service
Walt Disney Co. (NYSE: DIS) The gains were reported just over a week ago after close of trading on Thursday May 14th. The company’s profits and sales exceeded projections, but a Disney + subscriber’s failure ultimately sank the stock. The stock’s 160-day moving average, which contained most of that post-profit carnage through the middle of last week, is up, and today DIS is up 1.6% to $ 174.44, despite its next obstacle in it insists on regaining its 140-day moving average. Below, we’ll analyze some of the option activity that has declined in connection with Disney’s Q2 annual report, as well as the best way to play the blue chip after the profits are in retrospect.
Amid the earnings excitement, Disney stock made it to the list of Schaeffer, Senior Quantitative Analyst Rocky White’s stocks that went up the most Option volume in the last 10 days with names highlighted in yellow that are new to the list. According to White, 196,108 calls and 142,295 puts were exchanged. The most popular contract during the period was the call of May 175, followed by the call of 172.50 on the same series. The most popular put during this period was the May 170 treaty.
Calls are still slightly more numerous than puts today, and the last time we checked, 36,000 calls and 21,000 puts were exchanged. The weekly 5/28 call with 175 strikes is the most popular, followed by the June 180 call which opens positions. This indicates that these traders are pricing in more upside for the underlying stocks at the time of the expiration date of these contracts.
It looks like option bears have stepped up their activity during this period. On the International Securities Exchange (ISE), the Cboe Options Exchange (CBOE) and the NASDAQ OMX PHLX (PHLX), DIS has a put / call volume ratio of 10 days, which is just below the top quartile of its annual range at a lot faster than usual clip can be picked up.
Despite the turbulent year for Alibaba stock on the charts, analysts remain confident. Of the 18 in the coverage, 17 rated it “Buy” or better compared to a “Hold” rating. The 12 month consensus price target of $ 299.44 represents a premium of 42.6% over current levels.
With post-earnings volatility mounting, now may be the perfect time to speculate about Disney stock’s next move with options. The security’s Schaeffer’s Volatility Index (SVI) of 23% is in the lowest possible percentile of its 12-month range. This means that option players are pricing in lower volatility expectations than year-round. Additionally, the security’s Schaeffer Volatility Scorecard (SVS) is 80 out of a possible 100 points, which means the stock tends to exceed these volatility expectations – a good thing for option buyers.