AT&T sees heavy bearish put volume ahead of earnings

AT&T (T) sees heavy bearish put volume with 79,350 puts traded, 4x the expected volume. The most active strikes are 3/7 weekly 27 and 27.5 puts, with a total volume of near 28,000 contracts. The Put/Call Ratio is 1.78 and ATM IV is up over 3 points on the day. Earnings are expected on April 23rd.

The telecommunications giant, AT&T Inc. (T), experienced a significant increase in put activity on Thursday, with 79,350 puts traded, four times the expected volume [1]. This heavy bearish put volume suggests that investors are bracing for potential losses in the stock price.

The most active strikes were the 3/7 weekly 27 and 27.5 puts, with a combined volume of nearly 28,000 contracts. The Put/Call Ratio, which compares the number of put contracts to call contracts, stood at 1.78, indicating a more bearish sentiment among investors [1].

AT&T's Implied Volatility (IV), a measure of the expected price swings in the stock, increased by over 3 points on the day [1]. This surge in IV could be attributed to the heightened uncertainty surrounding the company's upcoming earnings report, which is expected on April 23rd [1].

The recent increase in put activity and the resulting higher IV could be a response to concerns about the company's financial performance. For instance, AT&T's revenue has been declining, and its debt levels remain high [2]. Additionally, the ongoing pandemic and its impact on the economy could negatively affect the company's earnings.

Investors should keep an eye on AT&T's earnings report, as it could provide insight into the company's financial health and prospects for the future.

References:
[1] Barchart.com. (2023, March 30). AT&T Inc. (T) Stock Option Chain. Retrieved March 30, 2023, from https://www.barchart.com/stocks/options/AT/2023-03-31/AT-2023-03-31-option-chain
[2] Yahoo Finance. (2023). AT&T Inc. (T) Key Statistics. Retrieved March 30, 2023, from https://finance.yahoo.com/quote/T/key-statistics