Dish position sees unusual adjustment

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Dish Network saw a giant move yesterday, and one investor made an unusual adjustment to an earlier trade.

Back on April 20, a block of 10,000 May 24 calls were purchased for $1.15. Yesterday the satellite-television stock leapt more than 18 percent to a $29.78, its highest price in almost three years, following a strong earnings report.

Those same calls more than quadrupled in value to $5, so the investor sold them. He or she then purchased 10,000 contracts each in the June 29 calls for $1.45-$1.50 and $1.40 and the June 29 puts for $1.45-$1.50 and $1.40.

The trader collected a credit of $2.15, locking in a profit of 87 percent. The simple long position was replaced with a straddle that is looking for the stock either to continue higher or suddenly reverse lower. (See our Education section)

DISH, along with former subsidiary EchoStar, also settled a patent dispute with TiVo and reported its first customers gain in three quarters.

The adjustment of the trade pushed overall option volume in DTV to 13 times greater than average in yesterday's session.



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

Copyright © 2010 OptionMonster® Holdings, Inc. All Rights Reserved.


This article appears in: Investing , Options

Referenced Stocks: DISH , SATS , TIVO

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