Liberty Media Capital(LCAPA) is one of the tracking stocks of Liberty Global (LBTYA). LCAPA is a holding company, which through its subsidiaries engages in media, communications and online commerce with companies like QVC, Starz and DirectTV.

The stock is down 70% this year and 30% already this month. Like many names in media, its financial leverage is working against it.

One of Liberty’s recent filings shows the company has $33.11 of long-term debt per share and $18.30 of cash per share. The stock is trading around $4.76.

Options on LCAPA have come alive over the past two days.

Yesterday, market particpants traded 2,000 LCAPA April 7.50 Calls (NLDDU) for 35-50 cents, 40 times usual volume. These were mainly buyers, and almost all the contracts that traded were opened, which appears bullish.

Today, option trades have taken a more bearish view. 6,627 LCAPA April 5 Puts (NLDPA) have traded for roughly $1 — that’s 47 times usual volume.

The put buyers win if the stock goes under $4 and the call buyers win if it goes above $8. Sounds like an interesting strategy ove the next six months.

Whether the company is going to zero because of the heavy debt burden or the debt world will improve and the the stock will bounce significantly, we’ll have to wait and see. But, that’s the beauty of leverage.