May 04, 2012 at 14:49 PM EDT
Disney Options In Play Ahead Of Earnings
  Today’s tickers: DIS, NWL & HAIN DIS  - Walt Disney Co. –  Light front-month call buying in Disney this morning suggests some traders may be positioning for shares in the name to rally following the Company’s second-quarter earnings report on Tuesday of next week. Shares in the operator of the Happiest Place on Earth are down 2.0% at $42.92, joining in on the broad market decline on the heels of today’s jobs report. Traders picking up the May $43, $44 and $45 strike calls may see the value of their positions increase prior to expiration should Disney’s earnings beat expectations and send the price of the underlying higher. The most active DIS contracts at present are the Oct. $47 strike calls, with 5,000 lots changing hands in the first half of the session against open interest of 1,178 positions. It looks like most of the calls were sold for a premium of $1.17 each. The trader or traders responsible for the call sale keep the full amount of premium as long as shares in Disney fail to rally above $47.00 by October expiration. Strategists may be long the stock and selling covered calls, however, if these are naked short calls, sellers of the options face unbridled losses above a breakeven share price of $48.17. NWL  - Newell Rubbermaid, Inc. –  A large block of call options sold on Newell Rubbermaid launched the consumer products maker onto our ‘hot by options volume’ market scanner this morning. The massive trade indicates the seller of the options expects the price of the underlying to remain below $20.00 through June expiration. Shares in NWL are currently down 1.5% on the day at $18.37 as of 11:55 pm in New York. It looks like the trader responsible for the transaction sold 30,000 calls…

 

Today’s tickers: DIS, NWL & HAIN

DIS - Walt Disney Co. – Light front-month call buying in Disney this morning suggests some traders may be positioning for shares in the name to rally following the Company’s second-quarter earnings report on Tuesday of next week. Shares in the operator of the Happiest Place on Earth are down 2.0% at $42.92, joining in on the broad market decline on the heels of today’s jobs report. Traders picking up the May $43, $44 and $45 strike calls may see the value of their positions increase prior to expiration should Disney’s earnings beat expectations and send the price of the underlying higher. The most active DIS contracts at present are the Oct. $47 strike calls, with 5,000 lots changing hands in the first half of the session against open interest of 1,178 positions. It looks like most of the calls were sold for a premium of $1.17 each. The trader or traders responsible for the call sale keep the full amount of premium as long as shares in Disney fail to rally above $47.00 by October expiration. Strategists may be long the stock and selling covered calls, however, if these are naked short calls, sellers of the options face unbridled losses above a breakeven share price of $48.17.

NWL - Newell Rubbermaid, Inc. – A large block of call options sold on Newell Rubbermaid launched the consumer products maker onto our ‘hot by options volume’ market scanner this morning. The massive trade indicates the seller of the options expects the price of the underlying to remain below $20.00 through June expiration. Shares in NWL are currently down 1.5% on the day at $18.37 as of 11:55 pm in New York. It looks like the trader responsible for the transaction sold 30,000 calls…
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