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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.
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