Unusual Options Activity: KT Corporation (KT)

Shares of Korean telecom firm KT Corporation (KT) are up over 25 percent since early February. One trader sees a potential move higher in the coming months.

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  • That’s based on the October $15 calls. Over 7,440 contracts traded against a prior open interest of 188, for a 39-fold rise in volume. Expiring in 176 days, the contract would move in the money if shares rose another $2 from their current price, or about 15 percent.

    The option buyer paid about $0.60 for the contract. Shares of the company are at a 52-week high, nearly double off their 5-year low set in early 2020. The longer-term chart suggests that the company still has more room to run.

    In addition to traditional telecom services, KT also provides satellite and internet services, a cloud data system, and other digital services. Shares trade at 10 times current and forward earnings.

    Action to take: Investors interested in international diversification may like shares here, although the company doesn’t currently pay a dividend.

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  • Traders might just want to stick with the October calls, to play into the current trend. Priced at $0.60, they’re low enough to see triple-digit returns if the share price can clear $15 before the option expires, making for an attractive bet with low downside.

     

    Disclosure: The author of this article has no positions in the stock mentioned here, and does not intend to make a trade on this company in the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.