Telecom and communications giant Comcast (CMCSA) is down 13% over the past year. One trader expects further downside in the months ahead.
That’s based on the April 2025 $30 puts. With 211 days until expiration, 6,315 contracts traded compared to a prior open interest of 117, for a 54-fold rise in volume on the trade. The buyer of the puts paid $0.55 to make the bearish bet.
Comcast shares recently traded for about $39, so the stock would need to decline by at least $4, or 11%, for the option to move in-the-money. It would also mean the stock breaks well below its 52-week high of $36.43.
Although shares are down by double-digits over the past year, revenues are down by just 3%. While many consumers continue to cancel cable plans, Comcast’s other divisions provide it some economic diversity. And shares now trade at about 8 times earnings, making it a potential value play.
Action to take: Shares have been hovering in the high $30s for a few months, so investors may want to use any pullback in shares over the coming weeks to build a stake here. At current prices, Comcast pays a 3.1% dividend.
For traders, the April 2025 $30 puts could see mid-double-digit returns, provided there’s a sharp pullback in the stock over the coming weeks. Given the support zone shares are in, traders may want to look for a very quick profit on the downside in Comcast.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.