Dish Network Bulls Back for Seconds

By David Russell, reporter at OptionMonster

NEW YORK -- Dish Network (DISH) has been delectable for the bulls so far, and Thursday they were looking for another quick snack.

OptionMonster's monitoring programs detected early buying in the October 35 calls for 10 cents. After some 3,000 contracts changed hands for that price, the stock quickly started to fight back from a drop at the open.

Calls lock in the price investors must pay to buy stock, so they can generate some nice leverage in the event of a rally. And rally Dish did, ending the session up 4.75% to $35.74.

While that was a nice gain for the shareholders, option traders really cleaned up. Those calls inflated exponentially, at one point gaining more than 800% in a matter of hours to 95 cents. The stock needed to move quickly for the trade to work because the options expire this afternoon.

Earlier this month, investors bought January calls and sold January puts as Dish held support above its 100- and 200-day moving averages. They paid about $1.14 to enter that position, which is now worth $4.85 after the stock pushed higher.

Total option volume in the satellite-television and communications company was 10 times greater than average in Thursday's session.

Russell has no positions in DISH.

This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.