Weekly Calls Pop on Verizon's 5G Rollout

VZ's 20-day moving average has been a strong level of technical support in recent weeks

Apr 3, 2019 at 2:11 PM
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Verizon Communications Inc. (NYSE:VZ) today announced it's launching its highly anticipated 5G service in Chicago and Minneapolis. In the press release, the company says customers can expect download speeds of 450 Mbps, with speeds ranging as high as 1 Gbps. To utilize the service, users will need to add a Verizon 5G moto mod to their cell phone. As discussed on a recent Schaeffer's podcast, 5G technology is set to play a huge role in streaming video games. Meanwhile, today's launch has attracted VZ call traders, who may be speculating on more tailwinds in the days and weeks ahead.

So far today, more than 35,000 calls have traded, dwarfing the 4,300 puts traded and topping the average daily volume. Taking an even broader view, today's call volume ranks in the 95th annual percentile. Many short-term calls are seeing heavy trading, but most popular is the weekly 4/5 59-strike call, where data points to buy-to-open activity. If that's the case, these traders are expecting more upside from Verizon by week's end, when the contracts expire.

VZ calls were popular even before today, accounting for the top five open interest positions, and at the top spot is the front-month April 60 call. Data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows that 2.51 calls were bought to open for every put in the last two weeks, as well.

On the charts, the Dow component has been pushing higher since bottoming in the familiar $52-$53 area in late January, hovering near its November high of $61.58 thanks to ongoing support from the 20-day moving average. At last check, the shares were trading 0.6% higher at $58.90, putting its one-year gain at 24%.

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