Billion-Dollar AT&T Loan Boosts Stock

Options players are favoring calls today

by Laura McCandless

Published on Apr 7, 2020 at 2:37 PM

AT&T Inc. (NYSE:T) announced this morning a $5.5 billion term-loan agreement to give themselves "financial flexibility" during the global pandemic, and reaffirmed its commitment to pay a dividend. In response, the shares of the mobile are up 4% at $30.62 in afternoon trading.  

It's been a slippery slope downward for AT&T during the past few months. The equity hit a nine-year low of $26.08 on March 23, with its 10-day moving average guiding the stock lower. While T has since toppled this trendline, it is now contending with pressure at the $31 region, and is down 22.1% in 2020. 

Coming into today, six analysts considered T a "strong buy" or "buy," while the remaining 10 called it a "hold" or worse. Meanwhile, the 12-month consensus target price of $36.7 is a 19.7% premium to current levels. 

Puts have been dominating the options pits. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), 2.06 puts have been bought for every call in the past 10 days. This ratio sits in the 100th percentile of its annual range, suggesting the appetite for puts is much higher than usual. 

Today, however, sentiment has reversed. So far, 159,000 calls have crossed the tape -- three times the intraday average -- compared to 49,000 puts. Most popular is the April 31 call, where new positions are being opened. 

A Schaeffer's exclusive

6 Sectors for Summer

Access your FREE insider report before it's too late!



NEW! Explore Schaeffer’s Partners' deals and get connected to top online brokerages with deals tailored exclusively for our readers.  Get answers to your questions regarding transfer fees, commission rates, programs and available discounts related to online trading services.

MORE | MARKETstories

Research Exposes Shortcut to Stock Market Wins
A simple way to stop picking losers, and start cashing in like Wall Street's elite.
Google Postpones Android Reveal, "Now is Not the Time to Celebrate"
"Now is not the time to celebrate," Google said in a message on its website
ZNGA Zooms to 8-Year High on Billion-Dollar Deal
ZNGA is planning to buy Peak for $1.8 billion
Huge New Legal Marijuana Market Has Shortage Crisis
250 million Europeans have access to medical marijuana. There's already a shortage....