Back to Main

Bears looking to crush Virgin Media

By: optionMONSTER
Posted: 11/15/2012 5:15:00 AM
Referenced Stocks: VMED

Virgin Media has been on a monster run, but now the bears are looking for a drop.

optionMONSTER's Heat Seeker tracking system detected the almost 4,400 January 29 puts, most of which priced for $0.55. Volume was more than triple previous open interest at the strike, signaling that new money was being put to work.

Owning those puts lock in the price where investors can sell shares in the British cable company, no matter how far they fall. That right will increase in value if it drops, so the position is leveraged to move in the opposite direction as the shares. (See our Education section)

VMED fell 0.68 percent to $31.94 yesterday but is up more than 40 percent in the last three months. It spiked to an all-time high above $34 after a strong earnings report last month but has been drifting lower since.

Puts outnumbered calls by 29 to 1 in the name yesterday, a reflection of the bearish sentiment.

(A version of this post appeared on InsideOptions Pro yesterday.)