Call Traders Blast Spotify Stock After Bull Note

Call volume is running at five times the intraday average

Deputy Editor
Nov 1, 2021 at 10:51 AM
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The shares of Spotify Inc (NYSE:SPOT) are up 2.6% to trade at $296.92, after Morgan Stanley called the music streaming giant a "top pick." The firm cited the potential for accelerating growth in Spotify's Premium service and expanding profit margins as the catalyst for today's bull note.

Ahead of today's coverage, the brokerage bunch was extremely optimistic on Spotify stock, especially following an upbeat third-quarter earnings report. Still, there's plenty of room for additional upgrades going forward, as five still carried a tepid "hold," coming into today. 

Call traders are blasting the equity after the bull note. Already today, 15,000 calls have crossed the tape, which is five times the intraday average and nine times the number of puts exchanged so far. The two most popular contracts, the weekly 11/5 305- and 300-strike calls, have new positions being bought to open at each.

Echoing this, options traders overall have also been overwhelmingly bullish of late. SPOT's 50-day call/put volume ratio of 2.10 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) stands higher than all other readings in its annual range, showing long calls being picked up at a faster-than-usual clip. 

Fresh off its best month all year, Spotify stock added 28.4% in October; however, the equity is still down 5.5% in 2021. The shares are coming up against pressure at the $300 level, which weighed on the stock in April, though the equity is trading back above every major short- and long-term moving average. Year-over-year, SPOT is still up around 23%.


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