Carter Worth And Mike Khouw's AT&T Options Trade

On CNBC's "Options Action", Carter Worth spoke about unusually high options activity in AT&T Inc. T. He noticed a couple of bullish patterns on its chart and he thinks the stock might move higher. Worth showed on the chart the inverse head and shoulders pattern and a cup and handle pattern. He also noticed that the stock moved above its downtrend line, pulled back and then bounced off the trend line.

Mike Khouw said AT&T pays a big dividend, which makes calls cheap. He is also concerned about its big debt level and he thinks that it would be best to use options to make a bullish bet. He wants to buy the July 32 calls for 95 cents. The trade breaks even at $32.95 or 2.11 percent above the current market price.