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Most Active Options Update: Twitter Inc (TWTR)

Twitter Inc is seeing a rare uptick in put activity today

by 4/23/2014 12:37 PM
Stocks quoted in this article:

The 20 stocks listed in the table below have attracted the highest total options volume during the past 10 trading days. Names highlighted are new to the list since the last time the study was run, and data is courtesy of Schaeffer's Senior Quantitative Analyst Rocky White. One name of notable interest this afternoon is Twitter Inc (NYSE:TWTR).


Twitter Inc has been on the decline during the past couple of months, down more than 30% in the wake of its post-earnings bear gap in early February. Yesterday, the equity tried to stage a rebound, but this was quickly contained by its descending 32-day moving average. In today's session, the equity has resumed its downtrend -- last seen 0.3% lower at $45.88 -- causing puts to outpace calls, a rare occurrence in the equity's options pits.

By the numbers, around 15,000 puts have changed hands thus far, compared to 11,000 calls. The most active position is TWTR's weekly 4/25 45.50-strike put. Of the 4,760 contracts traded here, 88% have gone off at the ask price, signaling buyer-driven activity. What's more, implied volatility has shot 10.9 percentage points higher, and volume outstrips open interest, suggesting new positions are being initiated. Although TWTR breached the strike price earlier today, the put's delta is perched at negative 0.44, suggesting a roughly 44% chance of an in-the-money finish at this Friday's close, which is when the weekly options expire.

As mentioned, today's put-skewed session bucks the recent trend witnessed in Twitter's options arena. Specifically, over the past 10 sessions on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), traders have bought to open 58,696 calls on TWTR, compared to 39,953 puts, resulting in a call/put volume ratio of 1.47.

On the fundamental front, Twitter Inc (NYSE:TWTR) is slated to report quarterly earnings after the market closes on Tuesday, April 29. Although this scheduled event falls outside the lifetime of the aforementioned puts, it is worth noting that the equity shed more than 24% in the session following its early February announcement.


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