Charter Plunges 18%—What Storm Clouds Loom Over the Broadband Giant?

Summary
• Charter Communications (CHTR) shares tumbled 18.1% intraday, hitting a 52-week low of $309.81
• Q2 earnings missed estimates by $0.39, with adjusted EPS at $9.18 vs. $9.58 expected
• Customer attrition persisted: 117,000 Internet users lost, 80,000 video customers lost

The broadband giant’s stock is in freefall after a weak earnings report exposed ongoing subscriber struggles and margin pressures. With a 52-week range of $309.81–$437.06, CHTR’s sharp selloff has triggered panic across Wall Street. This article dissects the catalysts behind the collapse and what traders can do to position for volatility.

Earnings Miss and Customer Attrition Trigger Sharp Selloff
Charter’s stock cratered after its Q2 earnings report revealed a $0.39 per share miss on adjusted EPS expectations, with results of $9.18 versus the $9.58 consensus. The company also reported continued customer losses across core segments: 117,000 Internet customers and 80,000 video customers exited the business, despite a 24.9% growth in mobile lines. Free cash flow contracted 19.3% YoY to $1.0 billion, driven by unfavorable mobile device working capital and timing of tax payments. Management’s cautious guidance on capital expenditures and customer retention challenges further stoked investor fears about long-term profitability.

Bearish Playbook: Options and ETFs for a Volatile CHTR
• 200-day average: 370.54 (well above current price)
• RSI: 31.22 (oversold territory)
• MACD: -2.76 (bearish divergence)
• Bollinger Bands: Price at lower band (373.21–422.75)

CHTR’s technicals scream short-term bearish momentum, with RSI at multi-year lows and MACD in negative territory. The stock is trading near its 52-week low, with key support levels at $309.81 and $300.00. For traders, the most liquid options contracts offer asymmetric risk-reward profiles under a 5% downside scenario (projected price: $295.59).

Top Options:
• CHTR20250801P290 (Put):
- Strike: $290 | Expiry: 2025-08-01 | IV: 36.85% | Delta: -0.0979 | Gamma: 0.0102 | Turnover: 51,678
- Leverage Ratio: 388.05% (high reward potential)
- Theta: -0.0102 (minimal time decay)
- Implied Volatility: Mid-range (30–75% band)
- Turnover: High (51,678 contracts) ensures liquidity
- Why it works: This put option offers outsized leverage (388.05%) for a moderate delta (-0.0979), making it ideal for a bearish bet if CHTR breaks below $300. The high turnover ensures easy entry/exit.

• CHTR20250801C310 (Call):
- Strike: $310 | Expiry: 2025-08-01 | IV: 34.80% | Delta: 0.5288 | Gamma: 0.0249 | Turnover: 254,688
- Leverage Ratio: 45.99% (moderate reward)
- Theta: -1.2694 (significant time decay)
- Implied Volatility: Mid-range (30–75% band)
- Turnover: Extremely high (254,688 contracts) ensures liquidity
- Why it works: This call option balances leverage (45.99%) with a moderate delta (0.5288), making it a hedge if CHTR rallies from oversold levels. The high turnover ensures liquidity for quick trades.

Payoff Analysis (5% downside to $295.59):
• CHTR20250801P290: Put payoff = $4.41 per contract (290–295.59=4.41).
• CHTR20250801C310: Call payoff = $0 (295.59 < 310).

Actionable Insight: Aggressive bears should prioritize CHTR20250801P290 for a short-term bearish play. If CHTR breaks below $300, this put could surge. For a balanced approach, pair it with a short-term call (CHTR20250801C310) to hedge against a potential bounce.

Backtest Charter Stock Performance
The backtest of CHTR's performance after an intraday plunge of -18% shows mixed results. While the 3-day win rate is 51.15%, the 10-day win rate is slightly higher at 52.03%, the 30-day win rate is lower at 44.80%. The maximum return during the backtest period was 0.13%, which occurred on day 12, indicating that while there is a higher probability of a positive return in the short term, the overall performance in the medium to long term is lackluster.

Bull Traps Loom—Take Cover Below $310
The 18% selloff in CHTR is a warning shot for bulls, with technical indicators and fundamentals aligning for a bearish scenario. Key levels to watch: $309.81 (52-week low) and $300.00 (psychological support). A breakdown below $300 would validate the bear case, with the CHTR20250801P290 put offering outsized leverage. Meanwhile, the sector leader Verizon (VZ) is trading flat (-0.10%), suggesting broader carrier sector caution. Investors should prioritize short-term bearish options or ETFs like XLF for sector exposure. Immediate action: Short CHTR against $300 support or use the CHTR20250801P290 put for a high-leverage play.