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By Jud Pyle, CFA, chief investment strategist for


(CBS) - Get CBS Corporation Class B Report

was downgraded by Argus to hold from buy in the second week of August, resulting in heavy put-buying activity. We're seeing the opposite going on today, giving investors who remain bearish on CBS a healthy supply of puts.

Looking at the Oct. 10 puts, more than 5,200 contracts have hit the tape today, and most of the action happened on the sell side (there were more sellers than buyers). The volume-weighted average of these puts is 60 cents (meaning investors who sold these puts are essentially calling a floor in the stock around $9.40).

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These puts are home to current open interest of 432 contracts. The Oct. 10 puts have a delta of 30, meaning for every dollar move in the underlying, the puts should move 30 cents. CBS shares are currently trading up 4 cents, meaning these puts should have moved slightly more than 1 cent. The Oct. 10 puts have dropped 5 cents on the day, however, indicating more investors sold these options and are pushing their price down. These puts have an implied volatility of 65 and a 30-day realized volatility of 63.

CBS shares are currently trading at $11, down from $11.14 when we last covered option activity in CBS. In that article, we saw more than 18,350 Dec. 7.5 puts change hands with a volume-weighted average price of 50 cents. These puts had an implied volatility of 78 vs. the 30-day realized volatility of 92. Put-buyers of the Dec. 7.5 puts need CBS shares to expire lower than $7 to make money.

CBS did not announce significant news to catalyze the put-selling we're seeing today, but it's interesting that we're seeing investors turn moderately bullish on the mass media company just weeks after investors expressed bearishness or hedged long positions by purchasing downside protection.

Jud Pyle is the chief investment strategist for Options News Network ( and the portfolio manager of Options Alerts. Click here for a free trial for Options Alerts. Mr. Pyle writes regularly about options investing for

Jud Pyle, CFA, is the chief investment strategist for Options News Network. Pyle started his career in finance in 1994 as a derivative analyst with SBC Warburg. After four years with Warburg, Pyle joined PEAK6 Investments, L.P., in 1998 as an equity options trader and as chief risk officer. A native of Minneapolis, Pyle received his bachelor's degree in economics and history from Colgate University in 1994. As a trader, Pyle traded on average over 5,000 contracts per day, and over 1.2 million contracts per year. He also built the stock group for all PEAK6 Investments, L.P. hedging, which currently trades on average over 5 million shares per day, and over 1 billion shares per year. Further, from 2004-06, he managed the trading and risk management for PEAK6 Investments L.P.'s lead market-maker operation on the former PCX exchange, which traded more than 10,000 contracts per day. Pyle is the "Mad About Options" resident expert. He is also a regular contributor to "Options Physics."