Twitter Stock Call Options Pop During Record Win Streak

Twitter's been on a hot streak recently, and options bulls have taken note

Jul 14, 2017 at 3:14 PM
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Shares of Twitter Inc (NYSE:TWTR) has been unstoppable of late, a move not gone unnoticed by options traders. The stock posted its seventh consecutive daily win on Thursday -- TWTR's longest winning streak on record, according to Schaeffer's Quantitative Analyst Chris Prybal. 

Notably, the return during this current run higher has been relatively tame compared to Twitter's previous six-session win streaks. The shares added 9.07% from their July 3 close at $17.65 to their July 12 close at $19.25 -- second only to the January 2015 six-day streak in terms of smallest gain. As a point of comparison, the biggest return came last fall, when takeover chatter fueled Twitter to a six-day gain of 29.19%. Today, TWTR is up 2.3% to trade at $19.77, on track to extend its record-setting win streak to eight sessions. 

twtr stock price chart with daily win streaks july 14

What's more, the shares are poised to close north of $19.50 for the first time since last December. This area contained TWTR stock's surge off its mid-April annual lows, with the shares closing at $19.49 on May 16, before embarking on a four-week slide to the $16.40 region -- a neighborhood that served as support in late 2016 and early 2017.

TWTR Options Traders Target $20

Twitter options traders have shown an unusual interest in long calls during this hot streak, too. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), speculative players have bought to open 77,847 calls during the past 10 sessions, compared to 15,055 puts. The resultant call/put volume ratio of 5.17 ranks in the elevated 83rd annual percentile.

Most active over this two-week time frame has been TWTR's July 20 call, with 31,690 contracts exchanged. Data from the major options exchanges confirms buy-to-open activity -- a trend that seems to be continuing today. In fact, the July 20 call is one of Twitter's most active options this afternoon with 6,412 contracts traded, and it looks like options traders purchasing new positions. 

Additionally, buy-to-open action has been detected at the weekly 7/14 20-strike call, with some speculators betting on a round-number breakout by expiration at tonight's close. TWTR stock topped out at an intraday high of $19.97 earlier, and hasn't closed north of $20 since early October.

 

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