T-Mobile US Inc (TMUS) Options Heat Up Amid Data Plan Reveal

T-Mobile US Inc (TMUS) just revealed a new data plan called T-Mobile One

Aug 18, 2016 at 2:40 PM
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While it hasn't caught fire like this sector peer, T-Mobile US Inc (NASDAQ:TMUS) is 0.6% higher at $46.66. Boosting the telecom titan is the announcement of a new unlimited data plan, dubbed T-Mobile One. Options traders are responding, too, with calls changing hands at nearly double the expected intraday rate.

The most active strike is the out-of-the-money November 50 call. From all indications, traders are buying to open these calls, anticipating TMUS will topple the half-century mark -- and trek into nine-year-high territory -- by the close on Friday, Nov. 18, when the options expire.

If past is prologue, this shouldn't be a huge problem for the stock. After all, TMUS has advanced more than 19% year-to-date, and touched a multi-year high of $48.11 as recently as Aug. 8.

As such, bullish options betting has actually been quite common in recent weeks. TMUS sports a 10-day call/put volume ratio of 10.08 at the International  Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). Not only that, but this top-heavy ratio also outranks 90% of all other readings taken in the past year.

Further underscoring this prevailing call bias is the stock's Schaeffer's put/call open interest ratio (SOIR) of 0.25. The SOIR suggests calls quadruple puts among options expiring in the next three months. Plus, the reading sits below 84% of all other comparable ratios, looking back 52 weeks.

From a contrarian perspective, this options optimism isn't ideal for T-Mobile US Inc (NASDAQ:TMUS) going forward. However, turning to short interest, we see there's plenty of potential buying power still sitting on the sidelines. Specifically, 18 million shares are sold short, representing more than a week's worth of trading, at TMUS' typical volumes.

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