Options Traders Bet on DISH Rebound

By David Russell, reporter at OptionMonster

Dish Network (DISH Quote) got knocked down by nearly 10% Wednesday, but some options traders are betting on a rebound.

Volume in the July 15 calls rose to 11,853 against no existing open interest, according to optionMONSTER's Heat Seeker monitoring program. Two large purchases for $1.65 only seconds apart accounted for 70% of the volume at that strike, the most heavily traded in Dish Wednesday.

The stock fell 9.74% Wednesday to close at $15.56 after a federal court ruled Tuesday that the company is illegally using TiVo's(TIVO Quote) digital-recording technology. The ruling may force Dish to strike a licensing deal with Tivo, which rallied more than 50% on the news. Dish said it plans an appeal.

A purchase of 4,000 July 13 puts for 50 cents was made less than a minute before the call activity, suggesting that the trader was securing downside protection on his or her long position. Earlier in the day, investors aggressively sold Dish calls, driving volume in the June 15 strike to 7,526 against open interest of 4,880 contracts.