Market News

January 5, 2017  Thu 10:33 AM CT

A large trade is looking for Viacom to rally in the first quarter.

Our monitoring system detected the purchase of 3,000 March 40 calls for $1.05 and the sale of 3,000 March 45 calls for $0.15. Volume was well above open interest in both strikes, showing that these are new positions.

This vertical spread is looking for VIAB to rally above $40 by expiration. The sale of the higher-strike contracts reduces the cost of the long calls but limits potential gains, as the trader will be obligated to sell shares if they rise above $45. (See our Education section)

VIAB rose 1.56 percent to $37.17 in midday trading but is down 3 percent in the last three months. The media company reported mixed results on Nov. 9 and is scheduled to announce its next quarterly numbers in pre-market hours on Feb. 9.

Overall option volume was about average in VIAB so far today, but calls outnumber puts by a bullish 13-to-1 ratio.

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