AT&T Options (T): Unusual Trading Activity

| July 26, 2012 | 0 Comments

T OptionsOptions in telecommunications company AT&T (T) showed large options activity yesterday as the S&P started to give back morning gains.

AT&T bounced yesterday after falling with its earnings report in the previous session.  And one trader’s betting a floor has been established for the shares.

During yesterday’s trading session, our tracking system detected a trader come in and sell 20,000 T September $35 strike put options for $0.70 a piece.

The premium collected from the trade totaled an impressive $1,400,000.

Obviously, this put seller is betting T will hold that $35 strike price through September expiration.  And if it does, money will be pouring in!

But before we break down this trade, let’s first take a closer look at AT&T…

As most of you know, AT&T is the second-largest US wireless carrier.  It serves over 89 million customers and 12 million “connected devices” such as e-readers.

AT&T is also the dominant local phone company in 22 states, serving about 40 million phone lines, 16 million internet users, and 4 million television customers.

In addition, it provides phone and data services – such as Web hosting and data transport – to large businesses nationwide.

So, what’s going on with this trade? 

I think a large institution or hedge fund is banking on T holding up in a tough market.

Let’s not forget, AT&T has direct access to, and established relationships with, millions of residential and business customers.

In addition, the company’s high-speed internet service customer base is the largest of any provider in the US.  And it’s a loyal customer base as around half of these subscribers are also residential phone customers.

Finally, AT&T’s network upgrade plans will enable them to offer more services and improve the quality of those services.  This should help drive revenue growth without consuming loads of capital.

Bottom line…

T looks strong right now, and it seems that option traders believe it will remain strong in almost any market. 

For more detailed information on unusual options activity and how you can profit from it, be sure to sign-up for our daily newsletter, Options Trading Research.  It’s always 100% free and packed full of option trading ideas you can use immediately in your own portfolio.  Click here to subscribe for free.

Safe Trading,

Marcus Haber

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Category: Unusual Options Trading Activity

About the Author ()

Marcus Haber is the co-editor of Options Trading Research and boasts well over a decade of real-life options experience. Learning from some of the biggest names in the business, Marcus has served as an Options Strategist for a number of firms and was also appointed to the Options Advsiory Board with Pershing, a branch of the Bank of New York.