Options Intelligence Report: The Walt Disney Co. (DIS), Athenahealth, Inc. (ATHN) & Activision Blizzard, Inc. (ATVI)

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Aroma Of New 52-Week High At Disney Attracts Bullish Options Investors

DIS ñ The Walt Disney Co.
Bullish investors populated the options field on Walt Disney Company today as shares of the entertainment company surged 3.4% during the trading session to secure a new 52-week high of $36.88. Near-term optimists purchased 1,200 calls at the April $37 strike for an average premium of $0.16 apiece. Call-buyers at this strike make money if Disneyís shares increase another 0.75% from the new 52-week high of $36.88 to surpass the average breakeven price of $37.16 ahead of April expiration. Displays of bullish sentiment on the stock spread to the May contract where 10,000 put options were sold short at the May $35 strike for a premium of $0.52 each. The investor or investors responsible for the put selling action keep the full $0.52 premium received today as long as Disneyís shares trade above $35.00 through expiration day next month. Put-selling in this case indicates traders are happy to have shares of the underlying stock put to them for an effective price of $34.48 each should the put contracts land in-the-money at expiration.

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ATHN ñ Athenahealth, Inc.
The provider of Internet-based services for physician practices experienced a 0.55% decline in the value of its shares this afternoon to $36.22. One options player was prepared for the bearish movement in the price of the underlying stock and thus booked profits on a previously established long put position. It looks like the investor originally purchased 5,000 puts at the May $22 strike for an average premium of $3.10 each back on March 17, 2010, when shares reached an intraday high of $41.53. Additionally, the trader purchased 2,500 puts at the same strike for an average premium of $3.90 each on April 6, 2010, when ATHN shares traded up to $38.77. Today, the options player sold all 7,500 put contracts for a premium of $4.80 per contract, banking net profits of $1.70 each on the sale of 5,000 lots, and booking net profits of $0.90 apiece on the sale of 2,500 contracts. Thus, total profits enjoyed by the put player amount to $850,000 ($1.70*100*5,000) + $225,000 ($0.90*100*2,500) for net gains of $1.075 million. Perhaps anticipating continued share price erosion going forward, the trader established a new bearish stance at the lower June $35 strike price by purchasing 5,000 fresh put contracts for a premium of $2.15 each. The investor makes money on the new position if athenahealthís shares decline another 9.3% from the current dayís price to breach the effective breakeven point on the puts at $32.85 by June expiration day.

 

ATVI ñ Activision Blizzard, Inc.
Significant buying interest in call options on the maker of online, personal computer, console and hand-held games this afternoon suggests some investors are expecting Activisionís shares to reach a new 52-week high by expiration in May. ATVIís shares are up 2.9% to $12.47 as of 2:20 pm (ET), which is just $0.67 off the current 52-week high of $13.14 attained back on June 11, 2009. Bullish investors scooped up at least 18,000 calls at the May $13 strike for an average premium of $0.37 per contract. Plain-vanilla call buyers are prepared to accrue profits if Activisionís shares rally 7.2% over the current price of $12.47 to surpass the effective breakeven point on the calls at $13.37 ahead of expiration day in May. The surge in investor demand for calls on Activision lifted the stockís overall reading of options implied volatility 20.6% to 39.05% as of 12:25 pm (ET).

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