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December 20, 2012  Thu 12:20 PM CT

DISH: SEE CHART GET CHAIN FIND STRATEGIES
Dish Network has been unstoppable, and one investor apparently thinks that further gains might get out of control.

optionMONSTER's Heat Seeker tracking system detected a surge of call volume in the satellite-television stock, which gave the bulls giant profits in October. Today's activity focuses on the January 37, January 38, and March 37 calls.

Some 3,000 contracts traded in the January 37s for $2.80, and 6,000 January 38s changed hands for $1.05. Volume was below open interest in each strike, suggesting that an existing ratio spread was closed. He or she then replaced that strategy with a straight-long position in the March options

Ratio spreads can generate significant leverage on a small move but can lose money if the stock climbs too far too fast. The investor's decision to replace the trade with the March 37s alone reflects a belief that the sky's the limit for the share price. (See our Education Section for more on how to manage portfolios more effectively using options.)

DISH is trading at $36.55 this afternoon, up 2.64 percent on the day and 18 percent in the last three months. It's been gaining momentum since the summer despite mediocre earnings as fewer customers drop the service.

Total option volume is triple the daily average so far today, with calls outnumbering puts by a bullish 36-to-1 ratio.
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