Big media names draw bearish bets

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The bears targeted big media yesterday, snapping up puts in a content company, a broadcaster and a newspaper publisher.

via optionMONSTER's Depth Charge tracking system detected a late-day surge of put buying in Viacom, CBS, and Gannett that drove total options activity to more than 15 times the average level in each. The trades came amid heavy stock volume in the names as well.

The VIA.B August 25 puts were the busiest strike, with a single block of 20,247 purchased for $0.40 against open interest of just 11 contracts. The shares fell 1.94 percent to $30.76 yesterday and would need to decline further, near their September lows, for the puts to turn a profit.

At about the same time, 15,495 August 11 puts were bought in GCI for $0.50. The newspaper chain, which owns USA Today, fell 0.74 percent to $13.36 yesterday and is down 19 percent in the last two weeks.

In CBS, put buyers targeted the August 10 contracts, which saw volume of 14,296 against no existing pen interest. The operator of radio and television channels declined 0.62 percent to $12.85 yesterday. The puts, which priced for $0.30, and won't make any money unless CBS falls at least 25 percent by expiration.

The three companies reported improvements in business conditions during their last earnings reports. However, each is now trading below its 50-day moving average and showing signs of rolling over.

Given the timing of the trades, yesterday's put activity was probably the work of a single large investor positioning for the three companies to break down to significantly lower lows. This trader may expect management teams to issue bearish comments this earnings season, hampered by signs that the global economy is weakening.

The next scheduled events that could serve as potential catalysts for the stocks include GCI's earnings release on July 16 and CBS's announcement on August 3. Both will come out after the close.

(Chart courtesy of tradeMONSTER )



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

Copyright © 2010 OptionMonster® Holdings, Inc. All Rights Reserved.


This article appears in: Investing , Options

Referenced Stocks: CBS , GCI , VIA/B

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