Strategist Looks Into Options Activity Ahead Of Earnings At Disney, Activision Blizzard And Zillow

Benzinga spoke with TD Ameritrade's Chief Strategist, JJ Kinahan, who provided some insight on options activity at Walt Disney Co DIS, Activision Blizzard, Inc. ATVI and Zillow Group Inc Z ahead of earnings. All three companies will announce financial results after Tuesday's market close.

Activision Blizzard

The expert first went into Activision Blizzard, which is expecting a move of 4.7 percent. He noted that the calls and the puts are both trading four times their normal amount. “That being said, they don’t trade a ton,” he added.

The firm, however, is seeing some sellers of out of the money August $24 puts weeklies.

“Someone is taking a stand and saying they would be happy to buy if we go down another $1.50,” the strategist said.

Zillow

Kinahan then took at brief look at Zillow, which is expecting a move of 10.4 percent, with implied volatility at the 79^th percentile, a little bit on the higher side.

The expert told Benzinga that the firm has seen some buyers of the August $75 calls with expiration this week.

Disney

The analyst shared his thoughts on Disney. He started by highlighting the company has not missed EPS estimates since the second quarter of 2011. In fact, in the last two quarters, the beats reached double-digit percentages.

Kinahan assured Disney is expecting a move of approximately 3.2 percent, adding that its historical volatility stands pretty low, at the 11^th percentile.

“What is interesting to me," he continued, "is that you see a seller of the September $125 calls. That could be somebody taking profits out of earnings.”

“Overall, I would say that it’s been kind of mixed in terms of the options activity so far today,” the strategist concluded, highlighting that, “since the third quarter of 2005, they’ve sold off 8 of their last 10 Q3 earnings.”