Google Inc. (GOOGL), Twitter, Inc. (TWTR) Rekindle the Fire

Soon, tweets could appear in Google Inc (GOOGL) search results

Alex Eppstein
Feb 5, 2015 at 10:39 AM
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Two of the biggest names in tech are reportedly nearing a partnership, more than three years after ending a previous relationship. According to sources, Google Inc (NASDAQ:GOOGL) has agreed to a deal with Twitter Inc (NYSE:TWTR), allowing real-time tweets to appear in the former's search results.

The renewed relationship between the companies is advantageous for both. On the one hand, GOOGL will gain more immediate access to data from the microblogging site. On the other, TWTR will receive "data-licensing" revenue and expand the reach of its advertising efforts.

Moving along, neither GOOGL nor TWTR has been particularly impressive on the charts. Shares of the former are down 13% since their Sept. 19 high of $605.40 to trade at $527.21. In the same vein, while TWTR is up 3.6% this morning to trade at $42.17 -- ahead of tonight's fourth-quarter earnings report -- the stock remains 15.7% lower on a year-over-year basis.

Nevertheless, options traders remain positive on both. During the last 10 days at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), Google Inc (NASDAQ:GOOGL) has tallied a call/put volume ratio of 1.92 -- with speculators buying to open calls at nearly twice the rate of puts. To put that in perspective, the ratio was 1.68 two weeks ago.

In like manner, Twitter Inc's (NYSE:TWTR) 50-day ISE/CBOE/PHLX call/put volume ratio of 2.52 outstrips 88% of similar readings from the past year. In other words, traders have displayed a healthier-than-usual appetite for bullish bets over bearish in recent weeks.

Daily Chart of GOOGL since September 2014


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