Sarah Wasserman (swasserman@sir-inc.com) Put players have slammed DIRECTV (DTV) today, with roughly 6,400 of these bearishly oriented options changing hands -- triple the stock's expected single-session put volume. By contrast, fewer than 1,000 calls have been exchanged today.
DTV's December 42 put has been the star of the show, with 4,599 contracts changing hands -- 71% of which traded at the ask price, suggesting that they were likely purchased. With today's volume outstripping open interest at this strike, it appears that fresh bearish positions are being added here today. By buying to open DTV's December 42 put, option traders are counting on the digital television titan to sink below the $42 level over the next month.
The stock is currently hovering around $42.02, placing these 42-strike puts right at the money. In fact, DTV closed last week beneath its 10-week moving average, located just below $42.50, for the first time since mid-July. Going forward, this intermediate-term trendline could switch roles to act as resistance for the shares.
In fact, option players are quite skeptical of DTV, as evidenced by the stock's Schaeffer's put/call open interest ratio (SOIR) of 0.98, which ranks above 92% of all other readings taken during the past year. In other words, short-term traders have seldom been more bearishly aligned toward the entertainment equity.
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