Twitter Stock Rally Brings In Fresh Wave of Options Bulls

TWTR shares have eclipsed a key moving average

Oct 12, 2017 at 1:58 PM
facebook twitter linkedin

Twitter Inc (NYSE:TWTR) is up 4% at $18.43, putting the shares on pace for their highest close since their late-July bear gap. Interestingly, this puts TWTR stock on pace to close atop its 24-month -- or two-year -- moving average for the first time ever. Meanwhile, options traders continue to bet on more upside from the security.

twitter stock

First of all, the equity has a 10-day call/put volume ratio of 4.88 across the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), meaning almost five calls have been bought to open for every put. This ratio ranks in the 70th annual percentile, signaling a stronger-than-usual preference for long calls over puts.

It's more of the same in today's trading, where roughly 80,000 calls have traded, versus fewer than 20,000 puts. In fact, call volume is running at three times the expected pace, and in the lead by far is the weekly 10/13 18.50-strike call. Buy-to-open activity appears likely, so these bulls would be betting on more gains from TWTR before tomorrow's close, when the contracts expire.

Also popular today are the October 19, November 19, and December 17 calls. If traders are buying to open positions here too, they're speculating on Twitter at a good time. That's according to its Schaeffer's Volatility Index (SVI) of 34%, ranking only 8 percentage points from a 12-month low.

Minimize Risk While Maximizing Profits

There is no options strategy like this one, which consistently minimizes risk while maintaining maximum profits. Perfect for traders looking for ways to control risk, reduce losses, and increase the likelihood of success when trading calls and puts. The Schaeffer’s team has over 41 years of options trading success targeting +100% gains on every trade. Rest assured your losses are effectively limited to your initial cost at the time of making your move! Don't waste another second... join us right now before the next trade is released! 



Special Offers from Schaeffer's Trading Partners