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Trader looks to cash in on Bill O’Reilly’s departure from Fox News

Key Points
  • Despite the situation, 21st Century Fox stock is surging this year.
  • One trader is making a big bet the rally in Fox will continue.

Options Action: A bullish bet on Fox

21st Century Fox has taken center stage as the company grapples with the departure of star Fox News anchor Bill O'Reilly amid sexual harassment allegations, which he has vigorously denied.

Despite the situation, the stock is surging this year, and one trader is making a big bet the rally will continue.

On Wednesday, when the news of O'Reilly's split with the media giant broke, "[There was] four times the average daily call volume [in 21st Century Fox]," Mike Khouw of Optimize Advisors said.

The largest buyer purchased 7,000 of the May 31-strike calls for 74 cents each. This trader is betting over half a million dollars that Fox shares will close above $31 by May expiration. The stock is up more than 10 percent this year, but has fallen 4 percent since news of the allegations broke April 1.

"It looks like they're looking for the stock to play catch up, and this is basically going to resolve the stock's underperformance," Khouw said Wednesday on CNBC's "Fast Money."

Shares of Fox were trading in the $30.90 range during Thursday's session.