SPOT Eyes Fresh Highs on RBC Bull Note

SPOT calls are immensely popular today

Assistant Editor
Jul 2, 2020 at 1:13 PM
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The shares of Spotify Technology SA (NYSE: SPOT) are up 4.6% at $270.71 this afternoon, following a price target from RBC to $192 to $320, after the firm's Internet Music Survey found that Spotify matched Alphabet (GOOGL) subsidiary YouTube as the most popular source of music. The company also rolled out a new Spotify Premium Duo plan for couples at $12.99 per month. 

Last time we checked in on Spotify stock, the equity had just captured a record high after announcing a deal with reality TV star Kim Kardashian West. The stock has been on a tear since then, adding 43% in the last month alone. Today's pop has SPOT within a hair's breadth of its June 26 peak of $271.71. Plus, the equity is on track for its highest close on record. 

A closer look at analyst sentiment shows a mixed bag. Ten of the 19 in coverage call the stock a "buy" or better; though six sport a "hold," and three say "strong sell." Meanwhile, the 12-month consensus target price of $209.71 is a 22% discount to current levels, which indicates the security is primed for more price-target hikes. 

In the options pits, the security is seeing an influx in call volume. This is per SPOT's 50-day call/put volume ratio of 2.5 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) which ranks in the 76th percentile of its annual range. This means calls are being picked up at a faster-than-usual clip.

Echoing this, calls have been a huge hit today. At last check, 42,000 calls have changed hands, nearly double the average intraday amount, with volume pacing for the in the 98th percentile of its annual range. Most popular is the 7/2 275-strike call, followed closely by the 270-strike call in the same series, with new positions being opened at both.

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