Elon Musk Disrupts Twitter Stock Once Again

TWTR is off by nearly 38% in the last 12 months

Deputy Editor
Aug 30, 2022 at 9:34 AM
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Twitter Inc (NYSE:TWTR) is back in the spotlight today after Tesla (TSLA) CEO Elon Musk sent the social media company a second deal termination notice. Musk originally revealed plans to pull out of the $44 billion buyout in early July, due to concerns over the company's bot account figures. This second notice comes after a recent whistleblower complaint revealed major security issues, which Musk notes could have a severe impact on Twitter's business.

Last seen down 0.8% to trade at $39.83, TWTR has spent the last month consolidating above $40, with several long- and short-term moving averages coinciding with this area. However, the equity is on track to log a loss in August, and stands nearly 38% lower year-over-year. 

Options traders have favored bearish bets over the last two weeks. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the security sports a 10-day put/call volume ratio of 1.39, which sits higher than 93% of readings from the past year. Echoing this, TWTR's Schaeffer's put/call open interest ratio (SOIR) of 0.95 now stands in the 95th percentile of annual readings. In simpler terms, short-term options traders have rarely been more put-biased.

Options are an attractive route at the moment, per Twitter stock's Schaeffer's Volatility Index (SVI) of 55% that sits in the relatively low 32nd percentile of its annual range. This indicates options traders are pricing in extremely low volatility expectations for the time being. What's more, TWTR ranks high on the Schaeffer's Volatility Scorecard (SVS), with a score of 95 out of 100, meaning the security has consistently realized bigger returns than options traders have priced in.


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