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Traders expect more magic in Disney
Walt Disney is already at record levels, but one investor thinks
there is still magic in the stock.
optionMONSTER's Heat Seeker monitoring program detected the purchase of 25,000 January 2015 75 calls for $1.18 and the sale of an equal number of January 2015 80 calls for $0.69. Volume was more than 14 times the open interest at each strike, indicating that a new position was opened.
This bullish call spread is a long-term bet that the media giant will continue to rally in the next 22 months. It cost $0.49 to open and will inflate to $5 if DIS closes at or above $80 on expiration--a profit of 920 percent on a 40 percent gain in the share price. (See our Education section for more on how to generate leverage with options.)
DIS rose 1.12 percent to $56.94 yesterday and is up 32 percent in the last year, after breaking out to new all-time highs last May. The bullish strategy was the largest trade on a single-name stock in the entire session.
Total option volume in the name surpassed 67,600 contracts yesterday, 8 times greater than its daily average. Calls outnumbered puts by a bullish 9-to-1 ratio.