Walt Disney Inc. was trading 83.68 when a customer bought 25,000 of the Jan 2015 80 calls paying 7.60 a contract. The customer then sold 50,000 of the April 100 calls collecting 1.53.? Net the customer paid 4.56 for time 1 by 2 call spread.
This trade will perform best if Disney has a slow rallying to 95-100 over the next 6 months and implied volatility falls at the same time.? This trade was clearly built by a trader who understands options and term structure plays so the trader is certainly savvy with options, although that may not translate to stock price.? The advantage of this trade is because of owning an ITM call vs short multiple OTM calls is that it generates a time decay.
Traders looking to piggy back could buy an April call to take advantage of the now depressed April upside.? This trade should be viewed as moderately bullish the name and bearish volatility.