Buyout Buzz Fires Up Twitter Inc (TWTR) Call Buyers

Twitter Inc (TWTR) options traders are eyeing an end-of-week move higher

Mar 31, 2016 at 1:50 PM
facebook X logo linkedin

Social media stock Twitter Inc (NYSE:TWTR) is charging higher this afternoon, up 2.5% at $16.76. According to Trade-Alert, the rally is in response to unconfirmed takeover chatter. Regardless of the catalyst, it's clear options traders are anticipating even more upside through the end of the week.

At last check, TWTR calls are trading at 1.4 times the usual intraday rate. The weekly 4/1 series is in especially high demand, accounting for the three most active options. The top spot belongs to the weekly 4/1 17-strike call, where it appears traders are buying to open contracts hoping TWTR can topple $17 by expiration at tomorrow's close. Looking back, the shares haven't settled above the strike since March 14.

This is more of the same for the microblogging concern. During the past 10 days across the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), traders have bought to open more than four TWTR calls for each put. The resultant call/put volume ratio of 4.16 outstrips all but 4% of readings taken in the last year.

Another sign of the prevailing bias toward TWTR calls is the stock's Schaeffer's put/call open interest ratio (SOIR) of 0.52. The SOIR indicates calls nearly double puts among options expiring in the next month, and also ranks in the low 12th annual percentile -- meaning the short-term call-skew has rarely been more pronounced in the prior year.

In other words, it seems like options traders expect Twitter Inc (NYSE:TWTR) to break from its long-term trend lower. Since topping out at an annual peak of $53.49 last April, the stock has plummeted about 69%. And while today's breakout is impressive, it's been contained by TWTR's pesky 40-day moving average.

Sign up now for Schaeffer's Market Recap to get all the day's big stock movers, must-know technical levels, and top economic stories straight to your inbox.


Target Effortless Triple-Digit Gains Every Sunday Evening For Life!

This is your chance to triple your profit potential on Sunday evenings, without spending all your free time watching the market.

On Sundays, as a Weekend Plus subscriber, you’ll get up to 6 trades every Sunday, each targeting gains of 200% or more.

Start targeting gains like the ones our subscribers have seen recently, including:

213.3% GAIN on AutoNation calls
100.0% GAIN on Monster Beverage calls
100.4% GAIN on Walgreens Boots Alliance puts
100.4% GAIN on ON Semiconductor calls
257.7% GAIN on Dell calls

101.0% GAIN on Apollo Global Management calls
103.6% GAIN on JP Morgan  Chase calls
105.3% GAIN on DraftKings calls
101.3% GAIN on Airbnb calls
203.0% GAIN on Shopify calls
102.0% GAIN on Cboe Global Markets calls
100.9% GAIN on Boeing calls
102.1% GAIN on Microsoft puts
102.3% GAIN on First Solar calls
101.5% GAIN on PulteGroup calls
101.0% GAIN on Apple calls
209.4% GAIN on NXP Semiconductors calls
100.8% GAIN on Uber Technologies calls
100.4% GAIN on Academy Sports and Outdoors puts
102.2% GAIN on Trade Desk calls
100.8% GAIN on DoorDash calls
100.0% GAIN on Camping World Holdings puts
100.0% GAIN on Cboe Global Markets calls
100.2% GAIN on calls
238.5% GAIN on Oracle calls



Rainmaker Ads CGI