Trader Reaps $5 Million Windfall in Warner Bros Option Bet (1)

An investor is up about $5 million after taking a bullish options position in Warner Bros Discovery Inc. just hours before a media report that Paramount Skydance Corp. is preparing to buy a majority stake in the movie studio owner.

Shortly after 11 a.m. New York time, a trader spent $5.7 million on 100,000 Warner call options at a time when the CNN-owner’s shares were trading at $13.10. The contracts give the buyer the right to buy 10 million Warner Bros shares at $15 a piece, before Dec. 19. Simultaneously, the trader sold $41 million shares in Warner Bros, seemingly ...