Schaeffer's Midday Options Update Features Walt Disney, Toyota Motor, ARAMARK, Baidu.com, and Motorola.

CINCINNATI -- Today's Schaeffer's Midday Options Update features Walt Disney (NYSE:DIS), Toyota Motor (NYSE:TM), ARAMARK (NYSE:RMK), Baidu.com (NASDAQ:BIDU), and Motorola (NYSE:MOT). The Midday Options Update contains a brief commentary on the day's most notable activity and a table listing the most-active calls and puts for the day. The Midday Options Update is published every day at www.SchaeffersResearch.com - the home of Bernie Schaeffer and Schaeffer's Investment Research. For additional information about this report or to have it delivered to you free via email every day click on the following link. http://www.schaeffersresearch.com/redirect.aspx?CODE=PRMOU12M&PAGE=1

Options Update: Heavy Put Action on Motorola

At 2:15 p.m. eastern time, the Federal Open Market Committee (FOMC) will emerge from its meeting and (more than likely) announce a 25-basis-point rate hike, boosting the interest rate to five percent. The market will look at the Fed's statement, which accompanies the rate decision, for any hint at an end to rate hikes. However, remember that Ben Bernanke was not happy with the Street's perceptions that he is dovish on inflation.

Crude prices slipped lower this afternoon, falling as low as $69.65 per barrel after this week's round of inventory supply reports. According to the Energy Department, crude inventories increased 300,000 barrels for the week, while the American Petroleum Institute (API) reported a drop of 47,000 barrels. Total supplies of 347 million barrels (according to the Energy Department) are 4.9-percent higher than a year ago, and are at their highest level since May 29, 1998. The Energy Department reported that gas supplies increased for a second-straight week, adding 2.4 million barrels. The API reported a gain of 922,000 barrels. Distillates added 200,000 barrels according to the Energy Department, while the API reported a gain of 1.8 million barrels.

MickESPN

Walt Disney (NYSE:DIS) is more than 0.50 percent higher this morning, thanks to its second-quarter earnings report. Early in the session, DIS moved to a one-year high of $29.95 per share. Late yesterday, DIS announced that second-quarter net income increased to 37 cents per share, better than last year's same-quarter results of 31 cents per share, which is exactly what the consensus expected. The enthusiasm at the house of mouse is a bit muted, as DIS's sales came in at $8.03 billion, short of the consensus estimate for $8.18 billion. The company's studio entertainment division, including home video, saw its sales drop 22 percent; mainly because of last year's release of The Incredibles. Overall, the company's operating income was higher thanks to growth at ESPN.

Oh What a Feeling!

Toyota Motor (NYSE:TM) reported a 39-percent rise in fourth-quarter profit thanks to upbeat sales, cost reductions, and a weaker yen. TM also forecast that global vehicle sales will increase six percent. The automaker also forecast a dip in profit of 4.5 percent in the company's fiscal year, which wraps in March 2007, thanks to recent weakness in the dollar. A weaker U.S. dollar hurts exporters (like TM), as overseas earnings disappear when earnings are converted into yen.

On the Mark

ARAMARK (NYSE:RMK) announced second-quarter income of 32 cents per share, compared to last year's earnings of 28 cents per share. Sales for the quarter came in at $2.83 billion, compared to last year's same-quarter sales of $2.66 billion. According to Thomson First Call, the consensus expected earnings of 29 cents per share on sales of $2.83 billion. For the fiscal year, the food provider forecast earnings between $1.60 and $1.65 per share, excluding tax adjustments of eight cents per share. The Street expects earnings of $1.65 per share.

Bai Jove!

Baidu.com (NASDAQ:BIDU) reported first-quarter earnings of 1.02 yuan per share (13 cents per share). Excluding items, the company earned 16 cents per share. BIDU's revenue nearly tripled, coming in at 135.6 million yuan ($16.9 million) from last year's same-quarter revenue of 45.7 million yuan. Expectations were for earnings of 12 cents per share on revenue of $15 million.

Most-Active Options Update

At 1:12 p.m. Eastern time, the Dow Jones Industrial Average (DJIA - 11,641.5) has added 0.02 percent. The S&P 500 Index (SPX - 1,323.92) is 0.09 percent lower, while the Nasdaq Composite (COMP - 2,329.2) is 0.32 percent lower. At 1:14 p.m. Eastern time, 2,363,662 calls have changed hands compared to 1,682,817 calls, equaling a single-day put/call volume ratio of 0.71. The CBOE's equity put/call volume ratio weighed in at 0.72.

Motorola

According to Oppenheimer analyst Lawrence Harris, Motorola's (NYSE:MOT) SLVR L7 cell phones are proving rather popular among Cingular customers. Apparently the company released a pink-colored version of the ultra-thin phone, just in time for Mother's Day. That's not the only news to mention MOT. Sifting through the Dow Jones Newswire, I noticed that several of the company's Vice Presidents and its Chief Financial Officer unloaded some of their shares.

Options players have jumped into the company's June 20 and 22.50 puts at a sizeable rate today, landing MOT on our most-active options list. Is this a smart move? Let's take a look.

Technically, MOT seems to be stagnating a little bit. Notice on the monthly chart below that 10 of the past 12 months have seen the phone firm close between 21 and 23. While an interesting development; that is not the reason I have chosen to show you the company's monthly chart. I have used this chart because it demonstrates the sizeable overhead resistance levied by the 25 level. This resistance is reinforced by the fact that the 25 strike is the residence of peak call open interest in the July and October series. Frequent readers of our website should know that a heavy accumulation of call open interest can provide options-related resistance for a stock (of course, the opposite is true with puts). It should also be noted that the 22.50 strike is the site of peak put open interest in the front three months of options for MOT. The scene is set for MOT to bounce between these levels for the near future.

As the shares try to trek higher, they may rely on the support of their 20-month moving average. The last time the equity finished a month below this trendline's support was August 2003. However, there is some room for the shares to slip, as this trendline is below the 20 level. If the equity needs to rely on this support, it will need to shed roughly 12 percent. Of course, if the shares can hold fast, this trendline may soon help in their assault on the 25 level.

Let's take a look at MOT's sentiment backdrop, shall we?

--Percent of analysts tracked by Zacks who rate the stock with a "buy" or better: 82%

--Number of analysts tracked by Zacks: 28

--Short-interest ratio: 0.82

--Schaeffer's put/call open interest ratio (SOIR): 0.27

--SOIR percent rank: 0

--Overall Schaeffer's Equity Scorecard rating: 4.0

Let's just agree that the speculative options crowd is rather optimistic when it comes to MOT. The company's SOIR of 0.27 is at its lowest point of the past 52 weeks, which is a bullish extreme. The Street at large reflects this enthusiasm, look at the analysts' ratings. According to Zacks, 23 of the 28 analysts covering MOT rate it a "buy" or "strong buy." Should this bullish bunch have a change of heart, the ramifications from downgrades could be severe.

Although short interest increased by more than 19 percent during April, potential short-covering support for MOT is RAZR thin. Less than one percent of the company's float is sold short, and it would take less than one day to cover these shorted shares. Any good news would simply be like throwing a PEBL in the ocean (translation: it would have little effect).

Click here to see a Monthly Chart of MOT Since January 2003 With 20-Month Moving Average: http://www.schaeffersresearch.com/wire?ID=15977

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About Schaeffer's Investment Research (www.SchaeffersResearch.com)

Schaeffer's Investment Research, founded by Bernie Schaeffer in 1981, is a financial information and trading resources company. It publishes Bernie Schaeffer's Option Advisor, the nation's leading options subscription newsletter. The firm's contrarian approach focuses on stocks with technical and fundamental trends that run counter to investor expectations. The firm's website, http://www.SchaeffersResearch.com, is recognized as one of the leading information sources for stock and options traders and was cited as the top options website by both Forbes and Barron's. Click here for more details about Schaeffer's trading methodology: http://www.SchaeffersResearch.com/method.