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Unusual Options Activity in Disney $DIS (1)

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Recently, there has been some unusual options activity in Disney $DIS. – PowerPoint PPT presentation

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Title: Unusual Options Activity in Disney $DIS (1)


1
  • OPTIONS TRADING

Unusual Options Activity in Disney DIS
2
Welcome to Options Trading Research Your premier
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3
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  • at the end of the video!

4
  • Hi, My name is Steve and Im with Options Trading
    Research, today were reviewing our recently
    published article

5
  • Unusual Options Activity in Disney DIS

6
  • As many of you know, unusual options activity can
    be a valuable indicator as to what traders are
    thinking, and more importantly, where these
    stocks are heading in the short-term.

7
  • This is something professional options traders
    pay a lot of attention to, and for good reason
    Unusual options activity can tip off big moves
    in a stock, either up or down.

8
  • So lets take a look at some interesting
    activity that caught our eye this week Disney
    DIS is, of course, one of the largest and most
    popular entertainment companies in the world.

9
  • The company is worth over 200 billion and
    generates over 50 billion in sales each year.
    For a good description of the company, follow the
    link.

10
  • DIS is trading at 118.34, up 28 for the year.
    Thats just 3 below the 52-week high, and 35
    above the 52-week low.

11
  • So what does unusual options activity in DIS tell
    us?

12
  • Omnipresent entertainment giant DIS is having an
    excellent year after showing a strong recovery
    since September. The stock has now significantly
    outperformed the overall market, and has been one
    of the top DJIA members this year.

13
  • A big reason for Disneys climb is the upcoming
    Star Wars movie being released in December. The
    new movie has already set records for pre-sale
    tickets. And, the associated merchandise if
    flying off the shelves.

14
  • Heres the deal
  • This week, a large amount of calls traded in DIS
    options. Keep in mind, a call option makes money
    when the underlying stock goes up before its
    expiration date.

15
  • Conversely, selling a call option is beneficial
    when a stock goes lower or stays neutral. To be
    more specific, a trader sold a block of 10,700
    April 130 calls.

16
  • These calls were sold for 2.62, resulting in
    total collected premium of close to 2.8 million.
    The volume far exceeds the open interest, so
    this is definitely opening action.
  • Heres the chart of DIS

17
(No Transcript)
18
  • As you can see, DIS has rocketed higher after
    dropping sharply during the August correction.
    Basically, since the beginning of October, the
    stock has done nothing but gone up. The price is
    now well over the 50-day moving average.

19
  • Despite the strong performance of late, the block
    of calls was sold at the 130 strike, although
    thats still over 10 higher than the current
    price.

20
  • Even though April is still several months away, a
    Star Wars bump is already being priced in to some
    extent. Moreover, these calls may be part of a
    covered call strategy, i.e. the calls were sold
    against a long stock position.

21
  • In that case, its still a bullish strategy that
    will make money up to 130. In other words, 130
    is far enough away that I would consider this a
    bullish signal on Disney, despite the potential
    ceiling.

22
  • More Options Trading Ideas

23
  • Keep in mind, theres a lot more unusual options
    activity going on than what we discuss here. We
    just try to bring you what we feel are the most
    significant ones and the ones you might actually
    be able to make some money on!

24
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26
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