Walt Disney Co (NYSE:DIS) is one of the stocks with the strongest bullish momentum today as the stock occupies the fifth position in the list of gainers (by market capitalization) in the market. As at 10:02 AM EDT today, the shares of Walt Disney have gained an impressive 2.76% to a trading price of $105.65 in addition to raising the company’s market capitalization to $179.76B.
Walt Disney Company together with its subsidiaries and affiliates is a diversified international family entertainment and media enterprise with five business segments: media networks, parks and resorts, studio entertainment, consumer products and interactive media.
Impressive Performance in One Month
I have written extensively on trading the options of Walt Disney as you can see here, here and here. In my last coverage of the stock, I talked about how the stock is enjoying an impressive bullish momentum on the strength of its strong quarterly earnings and the quality of revenue from its movie brands.
I also mentioned that 2015 is set to be a highly profitable year for bullish option trades on the stock of Walt Disney. My optimism is hinged on the notion that Walt Disney will deliver more growth from its product segments as it releases a Cinderella film, two Pixar movies, and a Star Wars release this year. I concluded that piece by recommending that you buy DIS Apr 2015 105.000 call (DIS150417C00105000) at an asking price of $2.15.
When I wrote that piece on February 5, the shares of Walt Disney were trading at $100.76 per share and the options contract was available at an asking price of $2.15. As at 10:02 AM EDT today, the shares of Walt Disney were trading around $105.64 to mark 5% gains in one month. The DIS April 105 call had an asking price $2.98 to mark a 38.60% increase in one month.
I suggest selling to close the DIS April 105 call option with the 39% gain as the contract moves towards its expiration next month. There isn’t much sense holding in to an options contract longer than necessary except if you plan to exercise the options to purchase share and to become an investor down the road.
New Reason to Buy DIS Call Options
If you were not impressed with the impressive quarterly results of Walt Disney and the promise of increased revenue down the road, you’ll surely be attracted to the new decision by the company’s management to increase its revenue by raising the admission charges to its parks. Starting February 22, the company announced that the one-day ticket price for its Disneyland, Walt Disney World and the rest its U.S theme parks has now been increased for anyone 10 or older.
For instance, the ticket to Disneyland that hitherto costs $96 now costs $99. Single-day tickets for Magic Kingdom at Walt Disney World now cost $105 from $99. In addition, the one-day ticket to Disney’s Hollywood Studios and Disney’s Animal Kingdom now cost $97 up from $94. An increase in the admission charges as not impacted on attendance to Walt Disney parks negatively; hence, we can expect the company to record an increase in its revenue going forward.
How to Trade DIS Options
I am optimistic about the prospects of Walt Disney and I still recommend buying DIS call options. The DIS May 2015 110.000 call (DIS150515C00110000) looks especially attractive at an asking price of $1.85.
— Daily Option Alerts