By David Russell
Viacom (VIA.B) is showing signs of breaking lower, prompting the bears to take a cheap downside bet ahead of its earnings report next week.
optionMONSTER' Depth Charge tracking program detected the purchase of 2,157 February 25 puts for $0.15 against no existing open interest. The shares fell as the trade appeared, indicating the dealer who bought the puts sold the stock to maintain a neutral position in the name.
VIA.B fell 3.74 percent to $28.04 in afternoon trading. Before today, the media stock had held up better than the broader market in 2010. This session, however, it has broken decisively through the 100-day moving average that had been providing support.
The scheduled event that could serve as a potential catalyst is the release of fourth-quarter results before the bell on Feb. 11. The company owns networks including MTV, Comedy Central, and Nickelodeon.
VIA.B must fall at least 12 percent by expiration for the options bought today to turn a profit.
Overall options volume in the stock was five times greater than average, with puts accounting for 84 percent of the activity.
(Chart courtesy of tradeMONSTER)