Charter Plunges 5.5%, What’s Fueling This Volatile Slide?

Summary
• Charter (CHTR) slumps 5.5% to $281.78, breaking below its 52-week low of $281.21
• Turnover surges to 3.36% of float, signaling aggressive short-term positioning
• Technical indicators flash bearish divergence with oversold RSI at 16.28 and MACD -14.82
• Sector leader Comcast (CMCSA) also weak, down 2.42%, hinting at broader media sector pressure
Charter’s intraday plunge has ignited a firestorm of options activity and sector-wide concern. With the stock collapsing to near its 52-week low amid a bearish technical setup, traders are scrambling to decipher whether this is a short-term selloff or a deeper structural shift in the cable and satellite TV sector. The move coincides with a broader media sector selloff, as Comcast—the sector’s bellwether—also faces downward pressure.

Bearish Technical Divergence and Options Volatility Fuel the Sell-Off
Charter’s 5.5% intraday drop is driven by a combination of bearish technical divergence and aggressive options positioning. The RSI at 16.28 (oversold) and MACD at -14.82 with a -9.53 histogram indicate a deepening bearish momentum phase. Bollinger Bands show the stock trading near the lower band ($325.61), while the 200-day moving average at $370.32 remains a distant anchor. Options data reveals intense short-term bearish positioning, with $295 and $300 call options seeing high turnover despite the stock’s downtrend. This suggests traders are hedging against further declines or capitalizing on volatility.

Media Sector Weakness Amplifies Cable Sector Pressure
The broader media sector is under pressure, with Comcast (CMCSA) down 2.42% alongside Charter’s plunge. While Charter’s decline is more acute, the sector-wide selloff suggests macroeconomic or thematic headwinds—such as subscriber attrition or regulatory uncertainty—are amplifying the move. The lack of sector-specific news (e.g., industry-wide tariffs or policy shifts) indicates this is primarily a technical correction rather than a fundamental breakdown.

Bearish Positioning and Options Liquidity: Key Plays for the Volatile Move
• 200-day average: $370.32 (far above current price)
• RSI: 16.28 (oversold, suggesting potential rebound)
• MACD: -14.82 (bearish), Signal Line: -5.28 (negative divergence)
• Bollinger Bands: Near lower band ($325.61), indicating extreme short-term weakness
• Support/Resistance: 30D support at $391.83–$394.23 vs. 200D support at $393.72–$396.29 (both well above current price)
• Turnover Rate: 3.36% (high liquidity for short-term trades)

Given the bearish technical setup and high options volatility, two contracts stand out:

• CHTR20250815C295:
- Type: Call
- Strike: $295
- Expiration: 2025-08-15
- IV: 35.08% (moderate)
- Leverage Ratio: 74.89% (high)
- Delta: 0.2859 (low sensitivity to price swings)
- Theta: -0.3946 (moderate time decay)
- Gamma: 0.0155 (modest sensitivity to price changes)
- Turnover: 214,371 (exceptionally high liquidity)
- Payoff at 5% down: $0 (strike above current price)
- Why it works: High leverage and liquidity make it ideal for volatility plays, though its low delta suggests it’s more suited for a bounce than a continuation.

• CHTR20250815C300:
- Type: Call
- Strike: $300
- Expiration: 2025-08-15
- IV: 34.70% (moderate)
- Leverage Ratio: 110.13% (very high)
- Delta: 0.2146 (low sensitivity)
- Theta: -0.3172 (moderate decay)
- Gamma: 0.0135 (modest sensitivity)
- Turnover: 176,808 (extremely liquid)
- Payoff at 5% down: $0 (strike above current price)
- Why it works: The highest leverage ratio (110.13%) among listed options makes it a high-risk, high-reward play for a sharp rebound.

If $281.21 support breaks, consider shorting the 2025-08-15 $295 put (CHTR20250815P295) for a bearish continuation.

Backtest Charter Stock Performance
The backtest of CHTR's performance after a -6% intraday plunge shows mixed results. While the 3-day win rate is 50.59%, the 10-day win rate is 52.10%, and the 30-day win rate is 44.54%, the returns over these periods are relatively modest, with a maximum return of only 0.02% over 30 days. This suggests that while CHTR has a decent chance of recovering from a significant drop, the overall performance in the following days is lackluster.

Key Levels to Watch as Volatility Peaks
The move below $281.21 (52-week low) and $295 support could trigger a deeper correction, but the oversold RSI and Bollinger Band extremes suggest a short-term rebound is possible. Aggressive traders should monitor the $295–$300 call options for liquidity-driven bounces, while the broader sector’s weakness—led by Comcast’s 2.42% drop—adds urgency to the technical case. If $281.21 breaks, the 200-day average at $370.32 becomes a distant target, but near-term volatility is likely to persist. Position accordingly with high-leverage options or a short-term bounce trade.