The Walt Disney Company (NYSE:DIS) – Trading traffic in weekly call options on The Walt Disney Company (NYSE:DIS) suggests traders are positioning for shares in the name to extend gains, with the stock up as much as 2.2% at a new all-time high of $63.25 today on the heels of an upgrade to ‘Buy’ from ‘Neutral’ with a target price of $72.00 at UBS. Shares in The Walt Disney Company (NYSE:DIS) are up nearly 50% since this time last year. Traders betting the stock pushes to fresh highs this week appear to be buying the May 03 ’13 $65 strike weekly calls. Roughly 400 contracts have changed hands versus open interest of 13 contracts as of 12:30 p.m. ET, and it looks like the bulk of the volume was purchased in the early going for an average premium of $0.07 per contract. Weekly call buyers make money at expiration this week if shares in Disney increase another 2.9% over today’s high of $63.25 to top the average breakeven point at $65.07. The Walt Disney Company (NYSE:DIS) reports second-quarter earnings after the closing bell next Tuesday.
Nam Tai Electronics, Inc. (NYSE:NTE) – Buyers of bearish options on electrical components and products provider, Nam Tai Electronics, Inc. (NYSE:NTE), last week prior to the company’s first-quarter earnings report ahead of the open this morning are seeing big gains in the value of those contracts, with shares in the name tumbling more than 30% today to the lowest level since August of 2012. Traders last week snapped up front month put options, buying around 1,500 lots at the May $10 strike for an average premium of $0.40 each and roughly 575 puts at the May $12.5 strike at an average premium of $1.48 apiece. The sharp selloff in shares of Nam Tai Electronics, Inc. (NYSE:NTE) today now finds the $10 and $12.5 strike put contracts changing hands at $2.40 and $5.00 apiece, respectively, as of 12:15 p.m. in New York. Overall options volume in excess of 12,000 contracts in play on Nam Tai Electronics, Inc. (NYSE:NTE) today is substantial versus the stock’s average daily volume of around 800 contracts. Shares in the name are currently down 33% on the day at $7.57.
Valero Energy Corporation (NYSE:VLO) – Shares in Valero Energy Corporation (NYSE:VLO) are on the rise today, up 1.7% at $41.42 as of 11:50 a.m. ET ahead of the company’s first-quarter earnings release prior to the opening bell on Tuesday. Big prints in weekly calls on Valero Energy Corporation (NYSE:VLO) in the early going this morning suggests some traders are positioning for the price of the underlying to extend gains in the near term. The May 03 ’13 $42.5 strike calls are the most active contracts on Valero by volume, with upwards of 5,900 lots in play versus open interest of 80 contracts. Most of the $42.5 calls, including a single print of 4,136 contracts, appear to have been purchased for an average premium of $0.56 apiece. Call buyers stand ready to profit at expiration this week in the event that Valero’s shares rally another 4.0% over the current price of $41.42 to surpass the average breakeven point on the upside at $43.06. The May 03 ’13 $42 strike call options are active as well, with around 600 lots purchased earlier in the session at an average premium of $0.69 each. Shares in Valero Energy Corporation (NYSE:VLO) are up roughly 70% since this time last year.
Caitlin Duffy
Equity Options Analyst
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