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Viacom bull tunes in for more upside

Posted
1/7/2013 4:16:00 AM
By: optionMONSTER
Referenced Stocks:VIAB

Viacom has been ripping higher, and one investor is doubling down on the media company.

optionMONSTER's Heat Seeker tracking program detected the purchase of 6,000 March 60 calls for $1.05 and the sale of 3,000 January 55 calls for $2.45. Volume was below open interest in the 55s, which suggests that an existing position was closed and rolled to the higher strike.

The investor collected a credit of $105,000, recovering at least some of the cost of the initial trade. He or she also gained an additional two months of upside exposure to the stock and increased the number of contracts owned, reflecting a belief that the shares will continue to rally until late in the winter. (See our Education section)

VIAB rose 1.88 percent to close at $57.51 on Friday after reaching an all-time high of $57.61 late in the session. The company--whose operations include MTV, Comedy Central, and Nickelodeon--spent the first half of last year in a tight range but began rallying in August. It pulled back in November, found support at its 200-day moving average, and has been explosive ever since.

Total option volume in the name was well above average, and calls outnumbered puts by about 14 to 1.