Viacom, Inc. (VIAB) Creeps Higher on Redstone Buzz

Viacom, Inc. (VIAB) is on the move, after the company and founder Sumner Redstone reportedly agreed to a settlement

Aug 19, 2016 at 2:37 PM
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The Viacom, Inc. (NASDAQ:VIAB) saga may be coming to its conclusion. VIAB and controlling shareholder Sumner Redstone have reportedly agreed to a settlement after months of warring, with CEO Philippe Dauman expected to hit the bricks. Against this backdrop, VIAB is currently up 2.4% at $43.88.

Amid a channel of higher lows and highs, VIAB has rallied roughly 45% since VIAB's post-earnings bear gap in February, when the shares plunged to a five-year low of $30.11. More recently, VIAB has been encountering resistance around the $45-$46 mark.

VIAB 081916 2

Once August options expire at the close, peak front-month open interest will sit in at the September 45 call. This abundance of calls overhead could exacerbate short-term resistance in the $45 area.

For option buyers looking to get in on the VIAB action, now is the time to make a move, with near-term options attractively priced, from a historical volatility standpoint. VIAB's Schaeffer's Volatility Index (SVI) of 33% is lower than 94% of all other readings from the past 12 months, indicating near-term option traders are pricing in relatively low volatility expectations for the entertainment giant. 

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