Unusual Options Activity: Comcast (CMCSA)

Shares of media and cable company Comcast (CMCSA) have been moving steadily higher over the past year. One trader expects that trend to continue in the next few months.

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  • That’s based on the November $57.50 calls. With just under 100 days until expiration, 9,415 contracts traded against an open interest of 331, for a 28-fold rise in volume. The buyer of the calls paid about $3.60 to make the trade.

    With shares around $59.30, the option is nearly $2.00 in-the-money at the moment, making for nearly half the cost of the call option.

    Comcast has performed about in-line with the stock market in the past year, up about 36 percent compared to a 32 percent rise in the S&P 500. The company continues to report double-digit revenue and earnings growth, as streaming and other digital plays have more than offset the decline in the company’s cable business.

    Action to take: Shares are attractive for investors looking for steady gains, and the stock currently trades with about a 1.7 percent dividend yield. The dividend has been rising at a modest rate over the past few years.

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  • The November call option trade can offer better percentage returns, and being in-the-money, it will likely retain some value at expiration. Buyers of the call can either hold until right before expiration, or look for mid-double-digit profits.


    Disclosure: The author of this article has no position in the company mentioned here, and does not intend to trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.

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