Dish Network Options (DISH): Unusual Trading Activity

| June 19, 2012 | 0 Comments

DISH OptionsOptions in satellite TV provider Dish Network (DISH) experienced a large amount of unusual trading activity right at the end of the day yesterday.

We’ve finally got a little market rally going.  And the tech sector may once again lead the way.

As you already know, some big tech names like Qualcomm (QCOM) and Research in Motion (RIMM) have been beaten down over the last few weeks.   

However, DISH has remained in the middle of its trading range.  The stock’s been fluctuating between $26.50 and $27.50 since June 1st.

This is important to note.  You see, experienced option traders look at these technicals in order to come up with their trades.

In this case, a single put trader dominated the option activity in Dish Network yesterday.  Apparently, he wasn’t concerned the stock remained stagnant at $27.60 a share.

This trader swooped in a sold 7,400 contracts of the DISH August $27 put options for an average price of $1.40 per share.

In doing so, he collected premium payments of $1,036,000.

Remember, put selling is a bullish trade where an option trader needs the stock to stay at or above the strike price by expiration. 

And that’s exactly what this trader is expecting.  As long as DISH remains above $27 a share by August expiration, he’ll walk home with over a million dollars in cash!

But it’s a big gamble during this rollercoaster type market… So, why DISH?

For those of you who don’t know, Dish Network serves 13.9 million customers in the United States via a network of owned and leased satellites.

DISH has also purchased a wireless spectrum covering the US that it may use to provide wireless telecom services in the future.  And this could indicate a possible partnership with an existing carrier.

But this is only half the good news on DISH…

Thanks to DISH’s low-cost platform and focus on efficiency, no other cable or satellite company has been able to match its prices.

In addition, other than the NFL Sunday Ticket package, DISH offers the vast majority of the most popular content available on DirecTV.  There’s little reason DISH shouldn’t hold its own in the battle for customers moving forward.

And lastly, DISH has been willing to experiment with new technologies… a key attribute given the change the TV industry is likely to experience.  For instance, DISH has partnered with Google on its television efforts.

For all of these reasons and more… I think this trader knows he has a good thought premise. 

And as a result, he’ll be rewarded handsomely!

For more detailed information on unusual options activity and how you can profit from it, be sure to sign-up for our daily newsletter, Options Trading Research.  It’s always 100% free and packed full of option trading ideas you can use immediately in your own portfolio.  Click here to subscribe for free.

Safe Trading,

Marcus Haber

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Category: Unusual Options Trading Activity

About the Author ()

Marcus Haber is the co-editor of Options Trading Research and boasts well over a decade of real-life options experience. Learning from some of the biggest names in the business, Marcus has served as an Options Strategist for a number of firms and was also appointed to the Options Advsiory Board with Pershing, a branch of the Bank of New York.