Markets

Bullish earnings play on Comcast

The bulls are tuned into Comcast with earnings due tomorrow.

optionMONSTER's Heat Seeker monitoring program detected the purchase of 25,000 November 62.50 calls, most of which priced for $1.49. Volume surpassed open interest of 16,833 contracts, which indicates that new money was put to work.

Long calls lock in the buying price for a stock. Investors use them to avoid missing a rally, while their cheap cost helps manage risk. They can also generate significant leverage. (See our Education section)

CMCSA is up 0.31 percent to $62.17 in afternoon trading and has risen 10 percent in the last month. The cable-television and media company surged to an all-time high near $65 in July before retreating along with the rest of the market. Comcast has also struggled with worries that viewers are abandoning traditional bundled packages.

It's noteworthy that today's investor chose options expiring four weeks from now because CMCSA has Weekly contracts coming due each Friday. This suggests that he or she is looking for gains after tomorrow morning's results.

Total option volume is quadruple the daily average, according to Heat Seeker. Calls outnumber puts by a bullish 11-to-1 ratio.

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

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

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