CNBC Stock Blog

Dish Stock is Down—So Why Are Options Bullish?

David Russell|writer, OptionMonster

Dish Network got knocked down by nearly 10 percent yesterday, but some options traders are betting on a rebound.

Volume in the July 15 calls rose to 11,853 against no existing open interest, according to OptionMonster's Heat Seeker monitoring program. Two large purchases for $1.65 only seconds apart accounted for 70 percent of the volume at that strike, the most heavily traded in Dish yesterday.

Shares fell 9.74 percent yesterday to close at $15.56 after a federal court ruled Tuesday that the company is illegally using TiVo's digital-recording technology. The ruling may force Dish to strike a licensing deal with Tivo, which rallied more than 50 percent on the news. Dish said it plans an appeal.

Dish stock will need to rise at least another $1.09 by the July options expiration for today's large trade to profit. A purchase of 4,000 July 13 puts for $0.50 was made less than a minute before the call activity, suggesting that the trader was securing downside protection on his or her long position.

Earlier in the day, investors aggressively sold Dish calls, driving volume in the June 15 strike to 7,526 against open interest of 4,880 contracts.

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David Russell is a reporter and writer for .