Unusual Options Activity: Altice USA (ATUS)

At least one trader sees the potential for telecom company Altice USA (ATUS) to surge in the next year. That’s based on the large volume in the January 2022 $35 calls.

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  • Expiring in 441 days, the options will move in-the-money on a 19 percent rally higher in shares. Over 2,500 contacts traded against a prior open interest of 157, making for a 16-fold rise in volume. The trader paid $2.20 for the contract on average.

    Shares of the stock are already near a 52-week high, and have rallied nearly 12 percent in the past week. The options bet is a bet that the recent move higher will continue over the next year.

    Action to take: In the short-term, shares are nearing an overbought level. Indeed, the option was rising to $2.60 per contract in trading on Thursday. So there’s a good chance the option could give up some gains as the stock pauses before moving higher.

    Traders may want to buy into this long-dated option to profit from a long-term trend. Try to target an entry price of $2.20 or lower in this case. Traders can potentially book triple-digit gains here if the rally continues, and there’s plenty of time on the option so declining time premiums won’t be a factor.

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