AT&T Inc. (NYSE:T) shares traded lower on Monday after the stock was downgraded by Citigroup.
Citigroup analyst Michael Rollins downgraded AT&T from a Buy rating to a Neutral rating and lowered the price target from $22 to $16, citing potential risks related to lead-sheathed cables.
On CNBC’s “Options Action,” Mike Khouw of Optimize Advisors said AT&T traded at 6x its average daily options volume, with calls outpacing puts by 2.5 to 1 on Monday. AT&T was also the fifth-busiest single stock on Monday.
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There were buyers of 63,500 of the July 14-calls at an average price of 12 cents per contract, Khouw said.
Traders risk less than 1% of AT&T’s share price to bet on a bounce in the stock.
AT&T is scheduled to report second-quarter financial results on July 26 before the market opens. Analysts expect the company to report earnings of 60 cents per share on quarterly revenue of $30 billion.
Price Action: AT&T shares fell 6.7% to close at $13.53 on Monday, but added 0.8% in today’s premarket trading session.
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