Q2 STOCKS TO BUY

Another Disney High Draws Fresh Batch of Bulls

Short-term Disney options are relatively cheap at the moment

Nov 26, 2019 at 2:56 PM
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Walt Disney Co (NYSE:DIS) stock's red-hot run is continuing today, up 2% to trade at $152.67, earlier tagging a record high of $153.41. This puts the shares -- which just wrapped up a six-week win streak -- on track for a third straight daily gain, and brings its month-to-date return to 17.6%.

Today's pop comes courtesy of a New York Post report, which cited data from Apptopia suggesting the company's streaming service, Disney+, is averaging almost 1 million new subscribers on a daily basis. A price-target hike to $138 from $137 at Bernstein may also be creating tailwinds, though this still represents a significant discount to current levels.

Options bulls are blasting the Dow stock during its latest climb, too. Roughly 290,000 DIS calls have changed hands so far -- double what's typically seen at this point, and four times the number of puts traded. The weekly 11/29 series is in focus, with buy-to-open activity detected at the 150-, 152.50-, and 155-strike calls, while slightly longer-term traders appear to be purchasing new positions at the weekly 12/6 155-strike call.

Call buying has already been a popular options strategy, and those purchasing short-term contracts are coming across attractive options premiums, historically speaking. Implied volatility (IV) levels have dropped off in the wake of Disney's earnings report earlier this month, with the stock's 30-day at-the-money IV of 18.9% ranked in the 17th annual percentile.

dis stock daily price chart on nov 26

 
 

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