Comcast started rallying this month, and one large investor expects it to keep moving higher through January.
OptionMonster's tracking systems detected the purchase of 10,000 January 17.50 calls for $1.05 and the sale of an equal number of January 16 puts for $0.95. Volume exceeded open interest in the puts but not the calls.
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CMCSA shares rose 1.38 percent to $16.92 in Monday afternoon trading. The cable stock is up 8 percent in the last month and is rebounding after finding support around the $16.60 level.
Today's options trade is designed to leverage small gains in the share price into big profits. It cost a net debit of just $0.10 per call contract purchased, meaning the investor will double his or her money for about every $0.10 that CMCSA climbs above $17.60 by expiration. Given the short position in the puts, it will lose money below $16.
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The next potential event that could serve as a catalyst for the shares is the release of third-quarter earnings before the bell on Nov. 4. CMCSA reported better-than-expected earnings and revenue the last time it reported on Aug. 6.
Overall options volume in the name was almost three times greater than average today.
Comcast Competes With:
Time Warner Cable
David Russell is a reporter and writer for OptionMonster.