AT&T Options Signal Deepens as Shorts Continue to Exit

AT&T has climbed 10.8% in a week to $24.66. The options market is now more call-heavy than at any point in the past year. Short sellers are still closing positions. All three signals are moving in the same direction.

PCR at a 52-Week Extreme

The put/call ratio dropped to 0.67 on July 29. That is 3.5 standard deviations below the 20-day mean of 0.76. The 52-week range runs from 0.49 to 0.94 — this reading sits near the lower end.

This extends the signal flagged in the July 22 note, when the PCR had already reached 0.69. It has since tightened further. Options traders are not fading the post-earnings rally. They are adding to it.

Analysts Piled In Post-Earnings

Six analyst actions landed on July 23 alone. Wolfe Research upgraded to Outperform with a $29 target. Morgan Stanley raised its target from $25 to $27, maintaining Overweight. TD Cowen lifted its Hold target from $32 to $33. Wells Fargo, which initiated Underweight at $18 earlier this month, raised that target to $20. RBC Capital reiterated Outperform at $27.

The consensus sits at buy. The Street is not uniform — Wells Fargo remains a notable bear — but the post-earnings direction of travel is upward on targets across most desks.

Short Sellers Are Leaving

Short interest has fallen 19.5% over the past month. It now sits at 1.52% of free float, down from peaks above 2.5% in mid-June. That is a low absolute level for a mega-cap telecom. The borrow market confirms no pressure: availability stands at 7,611% — roughly 76 shares available for every one currently borrowed. There is no squeeze dynamic here. Shorts are simply unwinding alongside the rally.

Cost to borrow rose 53% week-on-week to 0.43%. That is worth noting but remains well within normal range for a name this liquid.

What to Watch

The next earnings date is October 21. Capital Research and Management added nearly 64 million shares in its last reported period — the largest incremental institutional move in the top-15 holder list. Whether that conviction is rewarded will depend on whether AT&T's converged-services growth narrative holds through Q3.

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Data summary

• Price: $24.66 — up 10.8% on the week
• PCR: 0.67 — 3.5 std dev below 20-day mean; 52-week low
• Short interest: 1.52% of free float — down 11.1% week-on-week, down 19.5% month-on-month
• Cost to borrow: 0.43% — up 53% week-on-week
• Borrow availability: 7,611% — ample supply
• Wolfe Research upgraded to Outperform post-earnings, $29 target
• Next earnings: October 21