Even Big Bird Can't Save Time Warner Inc (TWX)

Time Warner Inc (NYSE:TWX) subsidiary HBO today announced it has signed a deal to air 'Sesame Street' for the next five seasons

by Karee Venema

Published on Aug 13, 2015 at 3:17 PM
Updated on Aug 13, 2015 at 3:21 PM

Time Warner Inc (NYSE:TWX) subsidiary HBO announced today it has inked a deal with Sesame Workshop to air "Sesame Street" for the next five seasons. The popular children's show will continue to be available on PBS -- its home for the last 45 years -- as well as HBO, HBO On Demand, and HBO Go.

The news has done little to prop up the shares of TWX, which were last seen down 0.3% at $79.67 -- extending last week's earnings-induced slide. What's more, option traders in today's session think there are even more losses ahead for the media giant in the very near term.

Specifically, TWX puts are trading at two times the expected intraday amount, with buy-to-open activity detected at the stock's weekly 8/14 80 strike. For those initiating new long positions here, the goal is for TWX to extend its retreat through tomorrow's close, when the weekly series expires.

Widening the sentiment scope reveals it's been long calls, and not puts, that option traders have been initiating at an accelerated clip. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), TWX's 10-day call/put volume ratio of 5.23 ranks in the 70th percentile of its annual range.

Echoing this is the security's Schaeffer's put/call open interest ratio (SOIR) of 0.30, which sits lower than 74% of all comparable readings taken in the past year. Simply stated, short-term speculators are more call-skewed than usual toward TWX.

As noted earlier, Time Warner Inc (NYSE:TWX) has had a rough go of it recently, shedding 12.8% since topping out at a July 16 14-year high of $91.34. More recently, the stock has fallen below its 320-day moving average -- a trendline that had helped usher TWX higher since November 2011.

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