OptionsHouse

Options Trading News

March 22, 2013  Fri 2:45 AM CT

DISH: SEE CHART GET CHAIN FIND STRATEGIES
Dish Network has been rising amid takeover speculation this week, and traders are betting on a floor beneath the stock.

optionMONSTER's tracking systems detected heavy selling in the April 34 puts, which saw nearly 6,800 contracts trade yesterday mostly for $0.35. The volume was more than 3 times higher than the strike's open interest at the beginning of the day, indicating that this is new activity.

These short puts are looking for DISH to stay above the $34 strike price in the next four weeks. If the stock falls below that level, the traders will face the obligation to buy the shares at an effective price of $33.65 once the credit from the put selling is included. (See our Education section)

DISH gained 1.01 percent to $36.85 yesterday while the broader market sold off. The stock had fallen into a tight range between $34 and $35 after hitting resistance at five-year highs near $38 earlier this year, but shares spiked higher on Wednesday with speculation that the satellite-television company would be acquired by rival DirecTV.

Yesterday's trading pushed total option volume in the name past 8,000 contracts, quadruple its daily average for the last month.
Share this article with your friends


OptionsHouse

Premium Services

Education & Strategy

The Movement of Delta

In our last column, we spoke about delta. You might remember that we discussed what delta was and what factors affected or changed delta. As you recall, we stated that three factors will have an effect on delta. They were movements of time, volatility, and underlying price. Today, we want to take a further look into the change of delta, this time focusing on change due to the movement in the underlying price. 

View more education articles »