Cablevision has struggled, but investors see value in the name.
optionMONSTER's tracking programs detected a surge of put selling in the Long Island-based cable company, which is down 2 percent in the last year despite rallies by most of its peers. Activity focused on the April 14 puts, with more than 11,000 trading in volume well above the strike's previous open interest of 3,374 contracts.
The largest blocks changed hands at the $0.30 bid price, indicating that they were sold. If CVC stays above $14 through expiration the puts will become worthless and the investor will keep the income as profit. If not, they'll have to buy shares for $14, so he or she apparently considers that an attractive entry price. (See our Education section for more on the strategy .)
CVC rose 1.21 percent to $14.25 yesterday. The stock ended last month on a weak note, falling almost 10 percent after yet another poor earnings report, but the selling pressure has since abated.
The willingness to insure the stock against further declines reflects a vote of confidence in the stock. Competitors such as Comcast and Charter Communications have appreciated by 37 percent and 55 percent respectively in the last year, which could be leading some investors to think that CVC will benefit from strength in the broader industry group.
Total option volume was 7 times greater than average in the session.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
Copyright © 2010 OptionMonster® Holdings, Inc. All Rights Reserved.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
