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Call buyers stay tuned into Viacom

David Russell (david.russell@optionmonster.com)

Viacom has been going straight up along with other media names, and the bulls expect more gains in the next month.

optionMONSTER's Heat Seeker program detected the purchase of about 12,000 May 70 calls yesterday, with the largest block priced for $0.70. This is clearly fresh buying, as the volume dwarfed the strike's open interest of just 337 contracts before the session began.

Long calls provide inexpensive upside exposure because they lock in the price where shares can be bought. They can generate significant leverage if the stock climbs but will expire worthless if it doesn't in the next month. (See our Education section)

VIAB fell 3.73 percent to $64.02 yesterday but is up 21 percent so far this year. The company, whose brands include MTV, Comedy Central, and VH1, reports earnings on May 1.

Total option volume was 9 times greater than average in the stock yesterday, with calls outnumbering puts by a bullish 27 to 1.

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

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