AT&T Options (T): Unusual Trading Activity
Options 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.
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Safe Trading,
Marcus Haber
Category: Unusual Options Trading Activity
