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More upside seen for Dish Network

David Russell (david.russell@optionmonster.com)

The bulls continue to expect more gains from Dish Network.

optionMONSTER's tracking systems detected the purchase of 2,500 January 50 calls for $1.90 and the sale of an equal number of January 55 calls for $0.80, resulting in a debit of $1.10. Volume was below open interest at the lower strike, so there are two possible explanations for the activity.

One is that the investor owns shares in the satellite-media company and had previously sold the January 50s as part of a covered-call strategy . Rolling to the higher strike increases by $5 their eventual sale price if DISH continues to advance

Alternatively, both positions may have been opened. In that case the trade is a bullish call spread , with the potential to earn profit of 355 percent on a move to $55. (See our Education section for more on how to generate significant leverage with options.)

DISH is up 2.16 percent to $44.05 and is back to its highest levels since late 2007. The gains have come despite relatively weak financial results, with earnings missing consensus for at least four straight quarters.

Total option volume is about average so far today, according to the Heat Seeker. Calls outnumber puts by 3 to 1.

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