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Virgin Media investor buys protection

Mike Yamamoto (mike.yamamoto@optionmonster.com)

Virgin Media hit an all-time high today, and one large trader appears to be protecting gains.

optionMONSTER's Depth Charge system detected the purchase of 5,000 May 50 puts in less than 2 minutes today for $0.55. This is clearly fresh buying, as the volume dwarfed the strike's open interest of a mere 15 contracts before the session began.

The puts were not tied to any stock activity identified by our systems today but, given the huge run in VMED's shares, they could well have been bought as a protective hedge on a long position established earlier. The contracts lock in the price where the stock can be sold no matter how far it might fall. (See our Education section)

VMED is up 0.28 percent to $50.23 in afternoon trading after peaking at $50.30 this morning. The stock has soared more than 135 percent since bottoming at $21.25 just about a year ago.

The British cable company gapped up from below $39 in early February on news of a potential takeover by Liberty Global. That deal, valued at $15.8 billion, was approved by the European Union last month

Today's put purchase was responsible for all but a handful of contracts traded in the name so far today. Only 9 calls have traded in the session, an indication of the day's bearish sentiment.

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