Options Trading News

May 10, 2013  Fri 3:16 AM CT

Dish Network fell on a weak earnings report yesterday, and traders are staying tuned for more downside.

optionMONSTER's Depth Charge monitoring program detected the purchase of 3,723 June 32 puts for $0.23 and the sale of an equal number of June 36 calls for $3.30. Volume was more than twice open interest at both strikes.

The investor probably owns DISH shares and is using options trade to protect their profits. He or she is now on the hook to sell the stock for $36 if it's above that level on expiration and has locked in a minimum exit price of $32.

Including the $3.07 credit collected, the trader would receive $35.07 to $39.07 a share. If the satellite-television stock remains between $32 and $36, the options will expire worthless, letting the trader keep the $3.07 and the shares. (More on collar strategies here.)

DISH fell 2.30 percent to $38.70 yesterday after profit and earnings both missed expectations in the first quarter. But it came into the session up more than 25 percent in the preceding year and was back to its highest level since late 2007.

Total option volume was more than 5 times greater than average in the session, according to the Depth Charge.
Share this article with your friends

Related Stories


Dish calls look for holiday rally

September 25, 2015

The satellite network fell in early August despite beating expectations on the top and bottom lines, but it has rebounded well off last month's lows.


Bulls beaming into Dish Network

September 21, 2015

The satellite network fell in early August despite beating earnings and revenue estimates, then plunged when the market sold off later in the month.


Premium Services

Archived Webinar

Education & Strategy

Options Academy: More on the Covered Call Strategy

Last week, we talked about the Covered Call and the misconceptions that surround it. We spoke about how an investor must realize that the Covered Call is actually a premium collection strategy and not so much a directional one. If an investor can grasp this idea, the investor stands to do a heck of a lot better in the strategy than they currently do.

View more education articles »