$DISH puts signal profits

Bearish option traders are signaling profits by doubling their money today in Dish Network (DISH).

On Jun. 13, Market Rebellion’s Unusual Option Activity Service found that 5,000 Weekly $19 puts were, expiring Jul. 1, were bought for $1.00 as part of a bearish roll with shares at $19.54. This was clearly fresh buying, as the open interest in the contract before the activity appeared was just 65.

Those puts were marked at $2.45 at the close of this session, over 2 times their purchase prices. The stock fell 15.3% in the same time frame, showing how quickly options can far outperform moves in their underlying shares on a relative basis.

Long puts lock in the price where a stock can be sold no matter how far it might drop, gaining value in a selloff with the potential for significant leverage. The contracts can be purchased either as an outright bearish bet or a hedge on a long-stock position.

DISH finished the session up 0.18% at $16.55.