By Ainvest in options-flow — 25 Sep 2025

📺 WBD Whale Unloads $7.1M Call Position - Acquisition Rally Cools? 🎬

📅 September 25, 2025 | 🔥 Unusual Activity Detected

🎯 The Quick Take

A massive $7.1 MILLION sell order just hit Warner Bros. Discovery call options this morning! This institutional player dumped 12,000 deep in-the-money January 2026 calls after the stock's +87.7% YTD surge. With Paramount-Skydance acquisition rumors driving the recent rally, this massive profit-taking could signal skepticism about the deal materializing. Translation: Smart money might be locking in gains before reality sets in! 💰

📊 Company Overview

Warner Bros. Discovery, Inc. (WBD) is a global media and entertainment conglomerate with:
- Market Cap: $49.1 Billion
- Industry: Cable & Other Pay Television Services
- Employees: 35,000
- Primary Business: Warner Bros. Discovery combines WarnerMedia and Discovery Communications, operating HBO Max streaming service, Warner Bros. Studios, and cable networks like CNN, TNT, TBS, Discovery, and HGTV. The company plans to split into streaming/studios and linear networks businesses in 2026.

💰 The Option Flow Breakdown

📊 The Tape (September 25, 2025 @ 10:45:08)

Time	Symbol	Side	Buy/Sell	Type	Expiration	Premium	Strike	Volume	OI	Size	Spot	Option Price
10:45:08	WBD	BID	SELL	CALL	2026-01-16	$7.1M	$15	12K	5K	12,000	$20.13	$5.90

🤓 What This Actually Means

This is MASSIVE institutional profit-taking! Let me break it down:

Someone's cashing out $71 MILLION worth of deep in-the-money calls
These $15 strikes are $5.13 in-the-money with WBD at $20.13
The January 2026 expiration gave plenty of time for catalysts to play out
Selling at BID = aggressive exit, not waiting for better fills
Volume 2.4x open interest = likely closing an existing position

Unusual Score: This is UNPRECEDENTED! 93,447x larger than average - activity of this magnitude happens maybe once in several years for WBD! 🌋

📈 Technical Setup / Chart Check-Up

YTD Performance Chart

WBD YTD Performance

Warner Bros. Discovery has been on an absolute tear with +87.7% YTD gains! The stock's journey from $10 to $20 tells an incredible turnaround story:

Key observations:
- Monster rally: Exploded from $8.50 lows to $20+ in September
- Volume surge: Recent volume spikes hitting 300M+ shares (3x normal)
- 52-week range: $10.66 - $20.01 (currently at highs)
- Volatility spike: 67.7% implied volatility signals big moves expected

Gamma-Based Support & Resistance Analysis

WBD Gamma S/R

Current Price: $20.04

The gamma landscape reveals critical levels that explain today's massive trade:

🟠 Call Gamma Resistance (Orange bars above price):
- $21.00: Strongest resistance with significant call gamma concentration
- $22.00: Major wall with heavy call positioning
- $22.50: Minor resistance level
- $23.00: Extended target if breakout occurs

🔵 Put Gamma Support (Blue bars below price):
- $20.00: Immediate support with strong put gamma (just pennies below current price!)
- $19.00: Secondary support floor
- $18.00: Major support with increasing put concentration
- $17.00: Deep support level

The chart shows we're trading right at the $20 pivot - a critical inflection point where gamma forces are battling. The massive call sale at $15 strike suggests the seller expects difficulty breaking above $21!

🎪 Catalysts

Upcoming Events

Q3 2025 Earnings - November 6, 2025
- Wall Street expects EPS of -$0.09 (Source: MarketBeat)
- Focus on streaming subscriber growth target of 150M by end of 2026 (Source: OTTVerse)
- Debt reduction progress from current $35.6B gross debt (Source: Ainvest)

Business Split Timeline - 2026
- Separation into Global Linear Networks and Streaming & Studios entities (Source: NY Times)
- Strategic "value unlock" with debt allocation between entities (Source: Monexa)

Paramount-Skydance Acquisition Speculation
- Reported cash-heavy bid preparation of $22-24 per share (Source: CNBC)
- Would create entity controlling 25% of $223B US media market (Source: The Conversation)
- No formal bid submitted yet despite weeks of rumors (Source: NY Post)

Recently Happened

HBO Max Brand Return - July 2025
- Restored HBO Max branding after abandoning "Max" experiment (Source: PPC Land)
- Strong Q2 results with 125.7M global subscribers, adding 3.4M (Source: Broadband TV News)
- 35% growth in streaming advertising revenue (Source: OTTVerse)

🎲 Price Targets & Probabilities

Based on gamma levels and catalyst analysis:

🚀 Bull Case (25% chance)

Target: $22-23 (Major call gamma resistance levels)
Requires formal acquisition bid at rumored $22-24 range
Successful Q3 earnings beat and streaming growth acceleration
Break above $21 resistance triggers gamma squeeze higher

😐 Base Case (50% chance)

Target: $19-21 (Current gamma concentration zone)
Stock consolidates recent 87% gains in this range
Acquisition talks continue without formal bid
Q3 earnings meet expectations with steady progress

😰 Bear Case (25% chance)

Target: $17-18 (Major put gamma support levels)
Acquisition talks collapse or bid disappointment
Q3 earnings miss on subscriber growth or debt concerns
Break below $20 triggers put gamma acceleration lower

💡 Trading Ideas

🛡️ Conservative: "Covered Call Collector"

Own 100 shares at current $20.04
Sell monthly $22 calls for ~$0.60 premium (3% monthly yield)
Profit from sideways action while acquisition drama unfolds
Protected up to 10% upside with income generation

⚖️ Balanced: "Put Spread Hedge"

Buy $19/$17 put spread for January expiration (~$0.50 cost)
Protects against 15% downside if deal falls through
Max profit $1.50 if stock drops to $17 (3:1 reward/risk)
Smart hedge given massive call selling activity

🚀 Aggressive: "Acquisition Pop Play"

Buy $21/$23 call spread for November expiration (~$0.45 cost)
Captures upside if formal bid announced before Q3 earnings
Max profit $1.55 if stock hits $23 (3.4:1 reward/risk)
Aligns with resistance levels but goes against today's flow

⚠️ Risk Factors

Real talk - here's what could go wrong:

Deal Risk: No formal bid after weeks of speculation raises red flags 🚩
Debt Burden: $35.6B debt with 18.13x debt-to-EBITDA is concerning
Linear Decline: Cable networks revenue down 9% with profits dropping 25%
Valuation Risk: Stock up 87% YTD may have priced in acquisition premium
Execution Risk: Complex business split in 2026 could face challenges

🎯 The Bottom Line

Here's the deal: Someone just took $7.1 MILLION off the table after WBD's monster rally! This isn't your neighbor Bob profit-taking - this is institutional money saying "thanks for the ride, we're out." 🎢

With the stock sitting right at the $20 gamma pivot and massive resistance at $21, the path higher looks challenging unless that Paramount-Skydance bid materializes. The smart money selling deep ITM calls suggests skepticism about sustained higher levels.

Action Plan:
- If you own it: Consider taking some profits or selling covered calls
- If you're watching: Wait for a pullback to $18-19 support before entering
- If you're bearish: Put spreads offer attractive risk/reward here

Mark your calendar for November 6th earnings - that's when we'll get real answers about streaming growth and the acquisition saga!

⚠️ Options involve risk and are not suitable for all investors. This analysis is for educational purposes only and should not be considered financial advice. Always do your own research and consult with a qualified financial advisor before making investment decisions.

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