Call Buying Stays Hot on Facebook, Inc. (FB) and Twitter, Inc. (TWTR)

Facebook Inc (FB) and Twitter Inc (TWTR) continue to outperform

Digital Content Group
Apr 16, 2015 at 11:23 AM
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Call buyers have been running rampant in Facebook Inc's (NASDAQ:FB) options pits for a while now. During the past 10 weeks at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock has amassed a call/put volume ratio of 2.67, which outranks 95% of all other readings from the past year.

The bullish trend is continuing today, where call volume is more than doubling put volume. Looking at the data, traders appear to be buying to open the April 84 and 84.50 calls, betting on FB to eclipse the strikes by the close tomorrow, when front-month options expire.

On the charts, FB has been solid, adding 5.5% in 2015 to trade at $82.34. In fact, the shares hit an all-time high of $86.07 late last month.

As impressive as FB has been, it's been outdone in 2015 by sector peer Twitter Inc (NYSE:TWTR), which has tacked on a whopping 43.3% since the start of the year. At last check, the shares were 0.2% higher at $51.40.

Daily chart of TWTR since January 2015

TWTR's options pits have seen activity similar to those of FB. The security's 50-day ISE/CBOE/PHLX call/put volume ratio of 2.85 is only 1 percentage point from an annual high. And as with FB, TWTR call buyers are active today, with speculators targeting the April 52 call. Data is giving the impression of buy-to-open activity here, meaning purchasers are betting on TWTR topping $52 by tomorrow's close.

On the Street, both Twitter Inc (NYSE:TWTR) and Facebook Inc (NASDAQ:FB) saw their price targets hiked at Pivotal Research this morning. The brokerage firm raised its price target to $54 from $51 on TWTR, and to $107 from $106 on FB -- territory never before explored by the latter. TWTR could be in-line for additional bullish attention, too. Despite the stock's technical strength, 12 of 26 brokerage firms maintain a "hold" or worse rating on the shares.

 

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