Thursday’s Vital Data: Walt Disney Co (DIS), Facebook Inc (FB) and Tesla Motors Inc (TSLA)

Stocks traded flat to higher on Wednesday, as Wall Street digested the latest ADP payroll numbers ahead of today’s key jobless claims report — two of the last reports to be released ahead of the FOMC’s potentially rate-hiking meeting in September. On the day, the S&P 500 rose 0.31%, but closed just shy of the key 2,100 level.

Caution remained the name of the game in the options pits on Wednesday, with put volume remaining high across the board. In fact, the CBOE’s single-session equity put/call volume ratio remained in one-week high territory with a reading of 0.77, while the 10-day moving average rose to a two-week high of 0.71.

On the equity front, Walt Disney Co (NYSE:DIS) saw record short-term option volume ahead of last night’s quarterly report — which didn’t go as well as the bulls might have hoped. Facebook Inc (NASDAQ:FB) is knocking on eBay Inc (NASDAQ:EBAY) and Etsy Inc’s (NASDAQ:ETSY) doors with plans to launch its own online marketplace. Finally, it really is all about deliveries for Tesla Motors Inc (NASDAQ:TSLA) — which is unfortunate for stockholders.

08-06-2015 Top Ten Options

Walt Disney Co (DIS)

DIS stock posted its worst single-session loss since 2011 on Wednesday, plunging more than 9% after the company missed top line revenue estimates. By the numbers, Disney earned $1.45 per share on revenue of $13.1 billion, versus expectations for earnings of $1.42 per share on sales of $13.2 billion. That said, a 3% drop in ESPN ad revenues, which extended the flagship-sports networks’ woes, also weighed heavily on DIS.

Option volume swelled to a short-term high of 386,522 contracts, with traders heavily favoring call contracts (57% of the total volume). Looking at the weekly Aug 8 series of options, traders were zeroed in on the $122 strike, where 4,236 call contracts are currently open. On the put side, peak open interest totals 3,639 contracts at the $110 strike. Both options are currently out of the money heading into the open, with DIS trading down near $111.

Facebook Inc (FB)

FB stock rallied some 2.5% on Wednesday, with the shares rebounding from their 20-day moving average to reclaim potential support at their 10-day trendline. Driving Facebook are reports that the company is testing its own online marketplace to compete with the likes of eBay and Etsy. A test program is already in place in Sydney, Australia, and Auckland, New Zealand, with Facebook attempting to capitalize on the growing trend of buying and selling between Facebook users.

FB call options were the cat’s meow on Wednesday, accounting for 72% of the 357,553 total volume changing hands on the stock. The short-term weekly Aug 8 series has traders betting on a potential breakout above $100, with 14,512 contracts representing peak OI for the series. Another 13,020 contracts at the $95 strike are already trading in the money after yesterday’s bounce higher.

Tesla Motors Inc (TSLA)

As I said on Tuesday, it’s all about deliveries for Tesla Motors. The company posted blowout second-quarter results, with losses narrowing much further than Wall Street was expecting and revenue beating consensus targets. However, Tesla slashed its full-year delivery guidance by 50,000 to 55,000 vehicles; quite a surprise given that Tesla’s second-quarter deliveries were already ahead of schedule. As a result, the stock is reeling more than 7% in premarket trading this morning.

Should these losses carry over into the open, the 3,611 put contracts open at the weekly Aug 8 series strike would suddenly be in-the-money, while peak overhead call open interest of 4,927 contracts at the $290 strike would be deep out of the money with less that two trading sessions left until expiration.

As of this writing, Joseph Hargett did not hold a position in any of the aforementioned securities.

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