Fresh M&A Buzz Fuels Call Volume On Twitter Inc (TWTR)

Calls continue to be popular on Twitter Inc (NYSE:TWTR)

Jun 28, 2016 at 12:18 PM
facebook X logo linkedin


Twitter Inc (NYSE:TWTR) is up 3% at $16.32, as M&A rumors continue to swirl. Specifically, Microsoft Corporation's (NASDAQ:MSFT) historic buyout of LinkedIn Corp (NYSE:LNKD) breathed fresh life into TWTR takeover rumors, and most recently, TechCrunch outlined a number of reasons why Twitter should put itself up on the auction block. Meanwhile, in the stock's options pits, calls continue to outpace puts, with the former leading the latter by a more than 2-to-1 ratio.

Drilling down on the day's action, it looks like a number of options traders may be selling to close their weekly 7/1 16- and 16.50-strike calls ahead of this Friday night's expiration. Elsewhere, it appears as if one bold trader may have initiated a short straddle with TWTR's August 18 calls and puts, expecting minimal movement from the shares -- or a sharp drop in implied volatility -- over the next two months.

Today's accelerated call volume is nothing new in TWTR's options pits, though. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the equity's 50-day call/put volume ratio of 3.34 ranks higher than 90% of all comparable readings taken in the past year.

Echoing this is TWTR's Schaeffer's put/call open interest ratio (SOIR) of 0.49. Not only does this show that call open interest more than doubles put open interest among options expiring in three months or less, but it ranks in the low 17th annual percentile. In other words, short-term speculators are more call-heavy than usual toward TWTR.

Technically, Twitter Inc (NYSE:TWTR) has been on a long-term downtrend, shedding more than half its value over the past 52 weeks. More recently, the stock's attempt to rebound has stalled out near the $17 level -- home to its late-April pre-bear-gap low -- as well as TWTR's descending 120-day moving average.

TWTR daily chart


Schaeffer's Expiration Week Countdown subscribers just made 200% GAINS on Twitter Inc (TWTR) calls! Sign up now for a trial subscription.
 

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 C3.ai calls
238.5% GAIN on Oracle calls

 
 
 


 
 

Rainmaker Ads CGI