TWTR Stock Waffles Amid Facebook Scandal

TWTR has made outsized moves compared to what the market has priced in over the past 12 months

Managing Editor
Mar 19, 2018 at 10:27 AM
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Shares of social media giant Twitter Inc (NYSE:TWTR) are falling today in light of Facebook's data mishap. Meanwhile, the company just announced a plan to ban cyrptocurrency ads. In response, TWTR stock has already explored both sides of breakeven today, but was last seen 0.8% lower to trade at $35.29.

Overall, Twitter has had a great year, picking up 48% year-to-date, touching a fresh two-year high of $36.80 on March 14, with help from the rising support of its 20-day moving average. Analyst sentiment hasn't reflected the stock's outperformance, however, as 23 of the 28 following TWTR carry "hold" or worse recommendations. What's more, the stock's 12-month price target of $27.55 is a nearly 22% deficit to current levels.

In the options pits, data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows TWTR with a 50-day put/call volume ratio of 0.29, ranking in the 74th percentile. This suggests puts have been bought over calls at a faster-than-usual clip during the past 10 weeks. Echoing this is a Schaeffer's put/call open interest ratio (SOIR) of 0.74 that ranks in the 88th percentile of its annual range, showing a heavier-than-normal amount of put open interest for contracts expiring within three months.

Lastly, the stock's Schaeffer's Volatility Scorecard (SVS) reading comes in at 92 (out of 100). In other words, TWTR has tended to make outsized moves over the past year, relative to what the options market has priced in.


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