Frontier Communications Corporation (FTR) Option Activity Accelerates

Frontier Communications Corp (FTR) inked a $10.5 billion deal with Verizon Communications Inc. (VZ)

by Karee Venema

Published on Feb 6, 2015 at 3:00 PM
Updated on Jun 24, 2020 at 10:16 AM

Frontier Communications Corp (NASDAQ:FTR) has been all over the map today. The stock hit a three-year high of $8.10 out of the gate, only to be down 4% around lunchtime, and was last seen 2.7% higher at $7.91. This back-and-forth price action has options players split, with both calls and puts crossing the tape at an accelerated pace.

15-Minute Chart of FTR Since Friday, Feb. 6

Most active is FTR's August 9 call, where speculators are buying to open the positions to roll the dice on a deeper trek into multi-year-high territory through August options expiration. Meanwhile, options bears are initiating new long positions at the stock's August 7 put, as they gamble on FTR to retreat south of $7 over the next six months.

Widening the sentiment scope reveals a distinct preference for long calls over puts in recent months. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock's 50-day call/put volume ratio of 12.50 ranks in the 99th annual percentile. With 15.2% of the stock's float sold short, though, a portion of this recent call buying may be a result of short sellers hedging against any upside.

On the fundamental front, Frontier Communications Corp (NASDAQ:FTR) confirmed today that it is taking roughly $10.5 billion in assets off of Verizon Communications Inc.'s (NYSE:VZ) hands. The news was met with a round of bullish brokerage notes; specifically, price-target hikes from Jefferies (to $8.50), BMO (to $8), and UBS (to $9).


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