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, Mike Khouw spoke about
Walt Disney CoDIS, which recorded a heavy decline on Wednesday and caught attention of options traders. The options trading volume was 9 times higher than the average daily options trading volume and Khouw noticed some activity in the September 115 calls and the January 120 calls. Traders were paying $1.50 and $2.85 respectively for these options.
Khouw explained that with these trades traders are betting that
Walt Disney Co is going to trade above $116.5 or 5 percent higher at the September expiration and above $122.85 or 11 percent higher at the January expiration. He added that after earnings implied volatility declines and traders can spend less to make a bullish bet.
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