Options: Investor Buys Upside in Comcast

By Jud Pyle, CFA, chief investment strategist for the Options News Network

CHICAGO (TheStreet) -- Although shares haven't closed higher than $18 in months, at least one investor expressed a bullish view of Comcast(CMCSK Quote) on Tuesday, looking for a big-time bump in the stock.

Looking at the out-of-the-money January 2010 18 calls, more than 50,000 of these options traded yesterday. These calls climbed 12 cents on the day and were home to open interest of 224 contracts. The Jan. 18 calls had a volume weighted average price (VWAP) of 40 cents yesterday, meaning bullish investors buying these options need Comcast shares to expire higher than $18.40 to make money.

Normal daily options volume in Comcast is approximately 3,000 contracts, compared to the 56,000 contracts that changed hands yesterday. The bulk of that volume accumulated in the Jan. 18 call series.

Comcast shares have not traded higher than $18 since October 2008. Remember though, this investor could also make money by selling out the calls should they rally with the stock prior to expiration.

Call-buying like this does not automatically mean that investors should run out and buy shares. The company did not announce big news today, but it is worth noting that there is at least one investor that could be betting that Comcast shares could shoot beyond its current levels during the next six months. Comcast share are currently down 37 cents to $14.32.

Jud Pyle is the chief investment strategist for Options News Network and the portfolio manager of TheStreet.com Options Alerts. Click here for a free trial for Options Alerts. Mr. Pyle writes regularly about options investing for TheStreet.com.