Bulls Bombard Twitter Inc (TWTR) Amid Analyst Day Rally

Twitter Inc is up more than 7% amid its first-ever financial analyst day

by Karee Venema

Published on Nov 12, 2014 at 2:18 PM
Updated on Apr 20, 2015 at 5:32 PM

Twitter Inc (NYSE:TWTR) is in rally mode today -- up 7.6% to trade at $42.60 -- as traders take kindly to the developments being unveiled at the company's first-ever financial analyst day. Specifically, CEO Dick Costolo said TWTR is exploring additional mobile apps, as well as tools to assist new users and improved private messaging functions. Against this backdrop, call volume has soared to two times what's typically seen at this point in the day, with a number of speculators rolling the dice on more gains through week's end.

Specifically, TWTR's weekly 11/14 41-strike call has seen the most action thus far, with 12,236 contracts on the tape. A healthy portion of these have traded at the ask price, and volume easily outstrips open interest, making it safe to assume new positions are being purchased.

Thanks to today's surge, these calls have not only moved into the money, but the stock is trading north of the at-expiration breakeven price of $42.00 (strike plus the volume-weighted average price of $1.00). Meanwhile, delta on the call has more than doubled to 0.79 from 0.30 at last night's close, suggesting a 79% chance the option will be in the money at Friday's close, when the weekly series expires.

Widening the sentiment scope reveals today's accelerated call activity echoes the growing trend witnessed in TWTR's options pits, despite the stock shedding almost a quarter of its value since hitting its most recent high of $55.99 in early October. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), Twitter Inc's 10-day call/put volume ratio of 2.53 ranks in the bullishly skewed 81st percentile of its annual range.


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