Tomahawk, WI 08/04/2014 (Basicsmedia) –Telecommunication giant, Verizon Communications Inc. (NYSE:VZ), considered a safety stock in the option trades was surging sometime last week, but the surge cooled off, raising concerns over the options long-term future in the market. Questions have already been raised’ on whether the yield plays or bond proxies’ are the places to be at this time, in the market. CNBC’s, Carter Worth, remains bullish on the stock despite it rising pretty well in the market and then suddenly plummeting.
“As a theme it is not much about safety stock working it is about whether this yield play, this so-called bond proxy is a good place to be. We like Verizon Communications Inc. (NYSE:VZ) and despite the big surge and then the give back nothing has changed on the pattern basis, and we have a lot of time on trade pattern,” said Mr. Worth.
CNBC Mike Khouw is also sticking with Verizon despite the unprecedented rise in option prices with stocks prices being below $50. Verizon stock price has declined more than the options in the previous trading sessions with the options going down by only 20 cents, making them more viable form of investments despite the recent setbacks.
“..I am going to definitely stick with this you will notice because the prices of Options rose a little bit despite the fact that the stock is actually below $50. The stock has declined quite more than the options, which is only down by 20 cents. This is actually an inflation adjusted bond proxy kind of utilities, kind of rentals so even if we do see a lot of concerns about rising yields I don’t think it is going to affect this one much, we have a lot of time till January,” said Mr. Khouw.
Mike Khouw also pointed out that the recent decline in the market was a reflection of an impact on inflation-adjusted bond proxy. Rising yields according to Mr. Khouw are not expected to affect Verizon Communications Inc. (NYSE:VZ) options much, especially on the fact that there is a lot of time till January to see how things play out.