Unusual Options Activity In Disney $DIS

| October 21, 2015 | 0 Comments

Star WarsUnusual Options Activity In Disney $DIS 

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.

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.

So let’s take a look at some ‘interesting’ activity that caught our eye this week…

Disney $DIS is one of the largest entertainment companies in the world.  The company is known for its amusement parks, movies, shows, consumer products, and more.  For a good description of the company, follow the link.

$DIS is trading at $109.77 up 17% for the year.  That’s 10% below the 52-week high and 33% above the 52-week low.

So what does unusual options activity in DIS tell us?

Although DIS is having a good year overall, the stock plunged around the time of the market correction.  It wasn’t just the correction though, as the company released worse than expected earnings around the same time.

However, Disney could get a huge boost from a blockbuster movie (much like it did when Frozen came out a couple years back).  You see, the new Star Wars movie is coming out in December and has massive buzz attached to it.  It certainly seems like the new Star Wars merchandise is flying off the shelves of retailers.

Here’s the deal…

This week, there has been a ton of buying action in DIS short-term calls.  Keep in mind, a call option makes money when the underlying stock goes up before its expiration date.

To be more specific, multiple traders have purchased over 16,000 110 calls expiring at the end of this week.  Prices paid have been from $0.18 per contract all the way to $0.86.  Open interest shows this to be opening action.

Here’s the chart of $DIS:

unusual option activity, a chart of DIS

You can see where DIS took it on the chin over the summer, but has since recovered nicely.  The stock has shot past the 50-day moving average and is clearly in a bullish trend.

Obviously, traders have become very bullish on DIS.  So, why are they buying short-term calls expiring in just a few days?

It’s hard to know for sure, but my money is it’s all related to Star Wars.  The new Star Wars trailer dropped this week and buzz over the movie is at a fever pitch.  From what I can see, there’s a significant amount of excitement building for the movie, and as the trailer makes its rounds this week, the momentum is only going to build.

More Options Trading Ideas…

Keep in mind, there’s 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!

Yours in Profit,

Gordon Lewis

Note:  Gordon Lewis has been trading options for more than 15 years and he now writes and edits for Optionstradingresearch.com.  You can sign up for the newsletter and get a free research report. We are your go-to source for top notch options trading research.

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Category: Unusual Options Trading Activity

About the Author ()

Gordon Lewis is the Chief Investment Strategist and editor for the popular daily newsletter – Options Trading Research. He’s also editor of our dynamic theme-based options trading service, Advanced Options Adviser, and one of the key analysts behind the highly successful Options Trading Wire.