What Options Say About This Satellite TV Operator
By: DISH Network has been largely trading sideways since early March, but options are positioning for shares to rally in the next month.
Activity was concentrated at the May 22 and May 23 contracts. Calls well exceeded open interest at both strikes and traded in strong buying patterns.
OptionMonster's systemsshow that 5,806 May 22 calls changed hands against open interest of 763 contracts for prices ranging from $0.70 to $0.90. At the May 23 strike, 2,747 calls traded against open interest of just 163 contracts for $0.40 to $0.55.
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The satellite TV operator finished yesterday up 1.49 percent to $21.82 but gave back that gain in after-hours trading. DISH has been bouncing between $20 and $22 since gapping higher on its earnings release March 1, when it reported that it had gained 250,000 subscribers while its cable rivals Comcast and Time Warner Cable lost customers.
The company is scheduled to announce its earnings results on May 17, the Monday of the week that ends in expiration on May 21.
For the calls purchased yesterday to turn a profit, the stock would need to gain roughly 4.5 percent to 7.8 percent respectively for the lower and higher strikes.
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DISH Network Competes With:
DIRECTV
Time Warner Cable
Comcast
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Options Trading School:
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Disclosure:
Najarian owns a long call spread in DISH.
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Pete Najarian is a professional investor, CNBC contributor, regular co-host of CNBC's "Fast Money" and co-founder of OptionMonster.com.
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