Investors keeping an eye on The Walt Disney Company (DIS) should take note of the recent buzz in the options market. The Aug 16, 2024, $65.00 Call for Disney has shown some of the highest implied volatility among equity options. But what does this mean for Disney stock?
Implied volatility indicates the level of movement anticipated by the market in the future. High levels of implied volatility suggest that big shifts in the stock price are expected, which could be due to an upcoming event that might lead to a significant rally or a sell-off. However, it’s essential to remember that implied volatility is just one piece of the puzzle for options traders.
Disney’s current situation presents a mixed picture. According to Zacks Investment Research, Disney holds a Zacks Rank #3 (Hold) in the media conglomerate sector, which places it in the bottom 35% of the industry ranks. Over the past 60 days, analysts have had a variation in their earnings estimates for Disney, with changes leading to a minor drop in the consensus estimate from $1.20 per share to $1.19 for the current quarter.
This scenario of heightened implied volatility could be an opportunity for those interested in options trading strategies, particularly those who sell premium to capture decay. Many seasoned traders use this strategy, hoping the stock’s actual movement will be less than anticipated by expiration.
For those looking to venture into options trading, you might explore the approaches used by Zacks Executive VP Kevin Matras, known for closing recent double and triple-digit winners. These methods could not only enhance profit potential but also help reduce trading risk.
What do you think about the potential movement in Disney stock? Do you see this as an opportunity or a risk? Share your insights in the comments below and let the community know your thoughts.
Source: [Zacks Equity Research](https://finance.yahoo.com/news/options-market-predicting-spike-disney-123600110.html)
