Bears score again in $VIAB

Downside option positions in Viacom paid off today for the second time this week as a crucial contract deadline looms tonight.

Back on Nov. 13, Investitute’s proprietary programs flagged the purchase of 15,000 June $30 puts for $2.20 as part of a bearish spread with shares at $32.68. This was clearly a new position, as open interest in the strike was a mere 3 contracts before that session began.

Those puts were marked at $5.35 this afternoon, about 2.5 times its purchase price. The stock fell 23.62% in the same time period, a large move but nowhere near that of its options on a relative basis.

It is the second winning trade in the name posted on Investitute in three sessions.

Long puts lock in the price where a stock can be sold no matter how far it might drop, gaining value in a selloff with the potential for significant leverage. The contracts can be purchased either as an outright bearish bet or a hedge on a long-stock position.

VIAB was down 2.46% to $25.34 today. On March 19 the cable network warned DirecTV subscribers that they may lose access to channels such as Nickelodeon, MTV, BET, and Comedy Central unless a new programming agreement is reached by midnight today.