Owning those puts lock in the price where investors can sell shares in the British cable company, no matter how far they fall. That right will increase in value if it drops, so the position is leveraged to move in the opposite direction as the shares.
Virgin Media shares fell 0.68 percent to $31.94 yesterday, but are up more than 40 percent in the last three months. Its stock price spiked to an all-time high above $34 after a strong earnings report last month, but has been drifting lower since.
Puts outnumbered calls by 29 to 1 in the name yesterday, a reflection of the bearish sentiment.
—By CNBC Contributor David Russell
Additional News: Virgin Media Draws Record New Subscribers
Additional Views: Bears Tune In to Virgin Media
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David Russell is a reporter and writer for OptionMonster. Russell has no positions in VMED.