By Jud Pyle, CFA, chief investment strategist for the Options News Network

The class-B shares of

Viacom

(VIAB) - Get Report

have jumped sharply from intraday lows Thursday at $14.75 a share to over $17 in afternoon trading today. This 15% rally off its lows can be attributed to possible earnings relief from numbers released prior to the open Feb. 12.

Another bullish sign was identified by the

Sidewinder

report at

www.ONN.tv

early this morning as 20,000 September 22.5 calls traded. These

out-of-the-money calls were picked up on the buy side in similar fashion to a recent transaction of 20,000 Sept. 20 calls

.

In the first 30 minutes of trading, 20,000 September 22.50 calls were purchased vs. open interest of 0 with the stock virtually unchanged. These calls were bought for $1.05 when the stock was around the $16.20 level, raising the at-the-money straddle from 8.57% to 9.67%.

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This $2 million option play comes at a time when VIA.B has been trading between $14 and $18 for over a month and a half. The highs from November may cap gains in this stock at the $22 level, but the options bought today and last week will significantly appreciate in value, even with modest price movement with a reasonable amount of time left until September expiration.

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

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."