Spotify Stock Sinks After Q3 Report

The streaming platform added 27% to its subscriber count

Assistant Editor
Oct 29, 2020 at 10:16 AM
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The shares of Spotify Technology SA (NYSE:SPOT) are in focus this morning, after the streaming service provider reported a wider-than-expected loss for the third quarter, and trimmed its fourth-quarter guidance. Revenue came in-line with Wall Street's forecasts, though, as the company saw its premium subscriber count grow by 27%. Out of the gate, Spotify stock is down 8.1% to trade at $254.23.

The shares looked well on their way to reclaim their July 22 all-time high of $299.67, after climbing to $292.79 two sessions ago. However, the equity has now shed over 7% this week, and just fell under the resistant 20-day moving average, after spending the better part of a month above the trendline. Still, longer term, SPOT has tacked on 72.9% in 2020.

In the options pits, traders have been flocking toward puts recently. At the the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the 10-day put/call volume ratio sits in the elevated 85th percentile of its annual range. So, while calls are still outpacing puts on an overall basis, this ratio suggests the appetite for bearish bets is unusually high. 

Shifting gears to today, both puts and calls have roared in popularity. Already over 5,000 calls and 3,000 puts have changed hands, four times the average intraday rate and volume pacing for the 97th percentile of its annual range. Leading the charge is the weekly 10/30 265-strike call, followed by the 250-strike put and 260-stike call from the same series, with new positions being opened at both.

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