AT&T Stock Moves Lower After Announcing Spinoff

Options volume is running at double the intraday average

Deputy Editor
Feb 1, 2022 at 12:22 PM
facebook twitter linkedin

The shares of AT&T Inc. (NYSE:T) are off 4.8% at $24.31 this afternoon, after the company revealed plans to spin off its stake in WarnerMedia, once its merger with Discovery Communications (DISCA) is done. According to reports, shareholders will receive 0.24 shares of Warner Brothers Discovery for every AT&T share they own, as well as an annual dividend payment of $1.11 per share -- nearly half the former $2.08 payment.

AT&T stock's options volume is hot following the announcement, with 218,000 calls and 161,000 puts traded so far, or double the intraday average. The most popular contract by far is the March 25 call, indicating these traders still see upside for T laying ahead.

A broader look shows options players have heavily favored puts. This is per the security's 10-day put/call volume ratio at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which stands higher than 84% of readings from the past 12 months. Echoing this, T's Schaeffer's put/call open interest ratio (SOIR) stands in the 88th percentile of the last year.

After rising above long-term pressure from the 80-day moving average to start off the year, T tumbled 8.4% on Jan. 26 to close below the trendline once again. AT&T stock is still struggling to conquer that moving average, and longer term the security now sports a 15% year-over-year deficit.

T Chart Feb 1


Stop leaving money on the table with the same old broken options trading approach...

There is no options strategy that more perfectly capitalizes during earnings season better than this simple call and put buying strategy. Perfect for aggressive traders looking to recover their suffering portfolios so far in 2022. With the simplest possible options strategy, Schaeffer's team with 100+ years of options trading excellence, target 200% gains on every single trade. So many trades are being beaten down by the market, but don't be one of them! Don't waste another second... join us right now before the next trade is released! 

Schaeffer's Daily Bulletin Offer


Special Offers from Schaeffer's Trading Partners