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Bears are tuning into Virgin Media

David Russell (david.russell@optionmonster.com)

Virgin Media has been going straight up, but yesterday the bears stepped in.

optionMONSTER's Depth Charge tracking program detected the purchase of more than 6,300 January 30 puts, most of which priced for $0.75. Volume was more than 18 times open interest at the strike.

Those puts lock in the price where investors can sell shares of the British cable company, so they will increase in value in the event of a drop. If it remains above $30 through expiration, however, the options will become worthless. (See our Education section)

VMED fell 0.73 percent to $32.70 yesterday, two sessions after hitting an all-time high above $34. Some investors had accurately predicted that strong move and rang up gains of more than 50 percent in less than a week.

The company has been in a steady uptrend since the spring and just reported strong third-quarter subscriber gains. Yesterday's bearish activity seems to be more a reflection of nervousness toward the broader market, where a pullback could drag down big gainers such as VMED.

Overall option volume in the name was 7 times greater than average yesterday, with puts accounting for more than three-quarters of the total.

(A version of this post appeared on InsideOptions Pro yesterday.)

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