Intelsat's Wild Ride Continues After Upgrade

Intelsat open interest is at an annual peak

Nov 20, 2019 at 10:35 AM
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It's been a volatile stretch for Intelsat SA (NYSE:I) stock, as evidenced by its 30-day historical volatility of 237.1% -- an annual high. Most of this action has been to the downside, after the Federal Communications Commission (FCC) backed a public auction for C-band spectrum, with I shares plunging from a Nov. 5 intraday peak at $26.90 to yesterday's 19-month low at $5.55.

Today, though, the extremely oversold Intelsat stock -- its 14-day Relative Strength Index (RSI) closed last night at 14 -- is up 13.8% to trade at $6.93. Sparking the tailwinds is an upgrade to "outperform" from "market perform" at Raymond James, which said the risk/reward for I is "now more interesting" following its "dramatic" retreat.

Options traders have been showing unusual interest in Intelsat during its extreme price moves. Currently, call and put open interest is docked at a 52-week peak of 335,198 contracts and 218,497 contracts, respectively. Narrowing the scope, the December 9 put saw a considerable rise in open interest over the last two weeks, and data confirms at least some buy-to-open activity here.

Outside of the options pits, there's plenty of skepticism priced into the underperforming shares. While four of seven analysts maintained a "hold" or "sell" rating prior to today, more than 18% of I's available float is controlled by short sellers. However, these bearish bettors remain sidelined in today's session, with Intelsat still on the short-sale restricted list following Tuesday's 24.2% slide.


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