CBS yesterday announced a sale of $ 3 billion in new shares
After the pricing of its new $ 3 billion share offering was recently announced, the shares of CBS Corporation (NASDAQ: VIAC) took a devastating fall. In fact, equity has fallen more than 30% in the last two sessions and things don’t seem to be slowing down today. On the last review, the VIAC was down 3%, most recently at $ 67.97.
The stock’s collapse comes just days after hitting a record high of $ 100.42 on March 22nd. Now, for the first time since October, CBS stock is back below its 40-day moving average, which has helped contain part of yesterday’s slump. Nevertheless, VIAC has had an impressive lead of 78.2% since the beginning of the year.
The option pits are also full of pessimism as puts are all the rage. This corresponds to the security’s 10-day put / call volume ratio of 4.48 International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which is higher than any other stock from the past year. This means that puts are picked up much faster than usual. In this sense, Schaeffer’s Put / Call Open Interest Ratio (SOIR) (VIIR) from VIAC is 3.43 in the 96th percentile of its annual range. In other words, short-term option traders were rarely biased.
Today’s option pits see an unusually large amount of volume on both sides of the corridor. More than 14,000 calls and 35,000 puts have already exchanged hands, which is twice the volume that is currently normally observed. The most popular is the April 67.50 put, followed by the 57.50 put from the same series, with the latter opening new positions.
For those looking to speculate on the stock’s next move, CBS stock options are currently available at a bargain price. The Schaeffer volatility index (SVI) from VIAC is 78% above 11% of all other measured values of the past year. This means that option players are currently pricing in lower than usual volatility expectations. What’s more, the stock Schaeffer’s Volatility Scorecard (SVS) is up 81 out of 100, suggesting the security exceeded volatility expectations over the past year – a boon for premium buyers.