In addition to its likely merger with Sprint (S), T-Mobile Us Inc (NASDAQ:TMUS) got another dose of good news, after it was reported the wireless carrier would join the S&P 500 (SPX) index next Monday. T-Mobile replaces Red Hat (RHT), which was bought out by IBM Corp (IBM) late last year. In response, TMUS is up 3.7% in electronic trading this morning.
T-Mobile stock now has its sights set on its May 20 all-time high of $80.93. The shares seem to have found support at their 80-day moving average, a trendline that has acted as support in the past. In fact, Schaeffer’s Senior Quantitative Analyst Rocky White points out that this moving average has sparked an average one-month move of 4.1% after the last eight signals.
Over in the options pits, puts have become popular recently. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the equity’s 10-day put/call volume ratio of 1.63 ranks in the elevated 81st annual percentile. Given the equity’s 18% uptrend in 2019, it’s possible some of these puts are being used by shareholders as an options hedge.
Whatever the reason, it’s an attractive time to purchase premium on T-Mobile stock. Its Schaeffer’s Volatility Index (SVI) of 27% ranks in the 23rd annual percentile, indicating short-term options are pricing in relatively low volatility expectations at the moment.