How large trader is playing Comcast
OptionMonster Staff | [email protected]
The cable giant rallied hard with the rest of the market after the presidential election but has been trading sideways for the last month. Our tracking program detected bullish three-way option play yesterday:
10,000 August 75 calls were bought for $2.72 against open interest of 848 contracts.
10,000 August 85 calls were sold for $0.59 below open interest of 22,502 contracts.
10,000 August 60 puts were sold for $1.88 against open interest of 34 contracts.
The strategy combines a bullish vertical spread with short puts. The call spread is looking for CMCSA to rally above $75 by expiration. The sale of the higher-strike contracts reduces the cost of the long calls but limits potential gains, as the trader will be obligated to sell shares if they rise above $85. The sale of the puts further lowers the cost of the spread, but the investor will face an obligation to buy shares if they fall below $60. (See our Education section)
CMCSA rose 1.19 percent to $69.87 yesterday and is up 4 percent in the last three months. The last quarterly report on Oct. 26 was bearish. The next quarterly report is scheduled for pre-market hours on Jan. 26.
Overall option volume was 3 times greater than average.