Charter Plunges 3.76%—Will This Bearish Slide Trigger a Sector-Wide Reassessment?

Summary
• Charter Communications (CHTR) slumps 3.76% to $298.095, hitting its 52-week low of $297.0801
• Earnings report reveals 117,000 internet customer loss in Q2 2025
• Options chain shows heavy call volume at $300–$310 strikes as volatility spikes to 73.53%

Charter Communications is in freefall after its Q2 earnings report exposed a widening subscriber exodus and triggered securities lawsuits. With the stock trading 3.76% below Friday’s close at $309.75 and a 52-week low in sight, investors are scrambling to parse the magnitude of its operational challenges. The $298.095 price point—just 0.3% above its 52-week low—underscores the market’s skepticism about Charter’s ability to reverse its customer attrition amid intensifying competition from mobile FWA providers.

Subscriber Exodus and Legal Storms Fuel Selloff
Charter’s 18.5% stock plunge on July 25—capping at $309.75—was directly tied to its Q2 earnings report, which revealed a 117,000 loss in internet customers and a 80,000 video subscriber decline. This marked a 746,000 net loss since Q4 2024, with CEO Chris Winfrey conceding competitive pressures from mobile network operators. Compounding the issue, two securities law firms (Howard G. Smith and Frank R. Cruz) launched investigations into potential federal securities violations, citing misleading disclosures about customer attrition. The resulting legal uncertainty and operational red flags triggered a liquidity crunch, pushing the stock to its 52-week low.

Cable & Satellite Sector Under Pressure as CMCSA Holds Steady
The Cable & Satellite sector faces headwinds as Charter’s subscriber losses highlight industry-wide challenges. While Comcast (CMCSA), the sector’s leader, posted a modest 0.55% intraday decline, its 100D MA of $381.18 remains intact, contrasting with Charter’s 30D MA of $392.09. This divergence reflects investor confidence in Comcast’s scale and strategic acquisitions (e.g., T-Mobile MVNO partnership). However, Charter’s 8.09x P/E—well below the sector’s 18.99x—suggests its valuation discount may not fully account for its operational risks, creating a potential divergence in sector performance.

Bearish Playbook: Options and ETFs for a Volatile CHTR
• RSI: 19.2 (oversold)
• MACD: -9.07 (bearish momentum)
• 200D MA: 370.45 (well above current price)
• Bollinger Bands: CHTR at 347.14 lower band (extreme bearish)

Technical indicators scream oversold conditions, with RSI at 19.2 and MACD histogram at -6.16. The 200D MA at $370.45 acts as a critical resistance level; a break below the 377.9–380.25 200D support zone could trigger a short-term rout. While the 52-week low at $297.0801 offers a floor, the options chain reveals aggressive bearish positioning. Two top options for a 5% downside scenario:

• CHTR20250801C300:
- Call, $300 strike, Aug 1 expiry
- IV: 37.44% (moderate)
- LVR: 75.95% (high leverage)
- Delta: 0.422 (moderate sensitivity)
- Theta: -1.58 (rapid time decay)
- Gamma: 0.030 (high sensitivity to price shifts)
- Turnover: 209,677 (liquid)
- Payoff: If CHTR drops 5% to $283.19, this call’s intrinsic value becomes $0 (strike > price).
- Why it stands out: High leverage and gamma make it ideal for aggressive short-term bearish bets as time decay accelerates.

• CHTR20250801C305:
- Call, $305 strike, Aug 1 expiry
- IV: 37.96% (moderate)
- LVR: 129.11% (extreme leverage)
- Delta: 0.286 (moderate sensitivity)
- Theta: -1.18 (rapid time decay)
- Gamma: 0.026 (high sensitivity)
- Turnover: 97,886 (liquid)
- Payoff: At $283.19, intrinsic value is $0.
- Why it stands out: The highest leverage ratio (129.11%) amplifies potential gains if CHTR continues downward, though rapid theta decay requires quick execution.

If $327 breaks, CHTR20250801C300 offers short-side potential. Aggressive bulls may consider CHTR20250801C305 into a bounce above $330.

Backtest Charter Stock Performance
The backtest of CHTR's performance after an intraday plunge of -4% shows mixed results. While the 3-day win rate is 50.75%, the 10-day win rate is slightly higher at 52.40%, the longer-term 30-day win rate drops to 44.94%. The average returns over these periods are relatively low, with a maximum return of only 0.07% over 30 days, indicating that the stock tends to recover only modestly from such significant dips.

Short-Term Bear Case: CHTR at 52-Week Low—What’s Next?
Charter’s 52-week low at $297.0801 is within striking distance, with the 200D MA at $370.45 acting as a critical psychological barrier. While its 8.09x P/E suggests undervaluation, the subscriber exodus and legal risks outweigh fundamental metrics. Investors should monitor the 377.9–380.25 200D support zone and CMCSA’s 0.55% decline as sector proxies. A breakdown below $347.14 (Bollinger lower band) could trigger a wave of stop-loss selling. For now, short-term bearish options (e.g., CHTR20250801C300) offer high-reward setups, but liquidity constraints and rapid theta decay demand swift execution.