Twitter Inc (TWTR) Option Traders Place Bullish Bets

Twitter Inc is trending higher, attracting near-term option bulls

Dec 22, 2014 at 1:51 PM
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Twitter Inc (NYSE:TWTR) is up 3.2% at $38.27, on what some are attributing to hopes for a CEO shake-up. The equity's short-term options are flying off the shelves, especially on the call side, where intraday volume is running at 1.5 times the norm. Furthermore, TWTR calls have outpaced puts by a margin of more than 3-to-1.

The stock's 30-day at-the-money implied volatility has edged 3.3% higher to 46.3%, reflecting the growing demand for near-term contracts. Most active by a mile is the January 2015 36.50-strike call, which is apparently being bought to open. By purchasing the calls to open, the buyers expect TWTR to extend its run north of the strike through the next few weeks.

In light of today's uptick, the shares of Twitter Inc (NYSE:TWTR) are on pace to end atop their 20-day moving average for just the third time since early October. Nevertheless, the stock remains roughly 40% lower year-to-date, and further upside momentum could stall in the $42 neighborhood -- home to TWTR's formerly supportive 200-day moving average.

Daily Chart of TWTR since October 2014

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