Spotify Stock Shocks Options Bears After Earnings

SPOT stock has been churning on the charts

Apr 29, 2019 at 9:55 AM
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Spotify Technology SA (NYSE:SPOT) said revenue jumped 33% to $1.69 billion in the first quarter -- more than analysts were expecting. The music streaming service also said paid subscribers hit 100 million in the three-month period, while monthly active users (MAU) rose 25% to 217 million. In reaction, SPOT stock is up 0.5% to trade at $138.90.

SPOT shares had a strong start to the year, rallying from their Dec. 24 low at $103.29 to their Feb. 25 four-month peak at $153.38. Since then, the stock has been chopping between support at its 80-day moving average and resistance at its 160-day trendline.

While weekly 5/3 call options were popular last week, recent activity at the major exchanges has shown a heavier-than-usual penchant for long puts. Specifically, SPOT's 10-day put/call volume ratio of 0.76 at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) ranks in the 94th annual percentile, meaning puts have been bought to open relative to calls at an accelerated clip.

Skepticism has been growing elsewhere on Wall Street, too. Short interest on Spotify jumped 11.4% in the two most recent reporting periods to 3.78 million shares. The bearish bandwagon is far from full, though, considering this accounts for less than 5% of SPOT stock's available float.


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