Options Volume Explodes on CBS Stock

There's been unusual spread activity in CBS' options pits

Nov 14, 2017 at 3:17 PM
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There's been notable options trading activity on media stock CBS Corporation (NYSE:CBS) today. At last check, calls and puts were both crossing at a rate projected to be three times the average daily volume, and total open interest on the security is now at a 52-week high. The vast majority of this volume comes from massive spread activity at the weekly 11/24 75-strike call and put, some of which may be liquidations.

By the numbers, more than 103,000 of each contract has been exchanged so far today. But coming into today, both of these strikes were home to more than 516,000 contracts, making the top two open interest positions for CBS, supporting the case that some traders are closing positions here. Meanwhile, the weekly 12/1 75-strike put and call are also home to notable open interest.

Looking back, put buying has been the more popular strategy among CBS options traders. Data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows a 10-day call/put volume ratio of 1.44, meaning put buying has easily outpaced call buying in recent weeks.

Moreover, the security has not been the most profitable name for premium buyers. This is based on its Schaeffer's Volatility Scorecard (SVS) of just 23, meaning it's rarely made moves bigger than what the options market was pricing in.

As for CBS stock's performance on the charts, the shares have been struggling in recent months, falling 15.5% over the past three months alone. The security touched an annual low of $52.75 on Nov. 3, and was last seen trading at $56.32. CBS' most recent breakout attempts were quickly thwarted by the 50-day moving average, a trendline that served as strong support earlier in the year.

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