Checking In on TWTR Ahead of Today's Earnings Report

The security has had a mixed history of post-earnings reactions

Digital Content Manager
Jul 22, 2021 at 3:14 PM
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The shares of social media giant Twitter (NYSE:TWTR) are up 0.4% to trade at $69.79 at last check, ahead of the company's second-quarter earnings report, which is due after today's close. Below, we will dive into how the security has performed on the charts as of late, and explore some of its previous post-earnings activity. 

Twitter stock has cooled off from its Feb. 25, all-time high of $80.75 over the last couple of months. However, the shares recently bounced off the $64 level, with support from the 40-day in moving average, which has been guiding shares higher since June. However, overhead pressure remains at the $72 level.


Over the last two years, the equity has had a mixed history of post-earnings reactions. In fact, four of these next-day sessions were higher during the company's past eight reports, while four were lower, including a 15% drop last April. TWTR has averaged a post-earnings swing of 13.3% in the last eight quarters, regardless of direction. This time around, the options market is pricing in a comparable move of 13.9%.

The security could benefit from a shift in the options pits. This is per Twitter stock's 10-day put/call volume ratio at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which sits in the 95th percentile of its annual range. This indicates long puts are being picked up at a faster-than-usual clip. 

What's more, the security's s Schaeffer's Volatility Scorecard (SVS) sits at 90 out of 100. This means the equity has exceeded options traders' volatility expectations in the past year -- a boon for premium buyers.


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