Twitter, Inc. (TWTR) Speculators Set Their Sights on $50

Traders have taken a shine to weekly Twitter Inc (TWTR) calls

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Published on Mar 23, 2015 at 1:42 PM
Updated on Apr 20, 2015 at 5:32 PM

Twitter Inc (NYSE:TWTR) is up 1.5% this afternoon to trade at $49.15, bringing its year-to-date advance to 37%. This technical tenacity hasn't been lost on options traders. At last check, calls were crossing at 1.2 times the usual intraday clip, and almost three times the rate of puts.

Seeing the most activity is TWTR's weekly 3/27 50-strike call, where close to 7,800 contracts are on the tape. A number of factors suggest these positions are being bought to open, as speculators bet the underlying will topple the half-century $50 mark by this Friday's close, when the weekly options expire. TWTR hasn't ended a week north of $50 since mid-October.

For the past several months, calls have been the options of choice among TWTR traders. During the past 50 days at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the social media stock has registered a call/put volume ratio of 2.73 -- outstripping 98% of comparable readings from the past year.

Analysts, however, are less convinced of Twitter Inc's (NYSE:TWTR) prospects on the charts. Of the 25 firms tracking the equity, 12 have handed out a "hold" or worse recommendation. Plus, the stock's average 12-month price target of $53.43 represents a less than 9% premium to current trading levels.


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