Pinterest Stock Stays Hot, But Options Traders Wary

New PINS options traders seem nervous, despite the stock's red-hot debut

Apr 25, 2019 at 1:42 PM
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Since making its public trading debut last Thursday, April 18, Pinterest Inc (NYSE:PINS) stock hasn't disappointed shareholders. In fact, the equity has yet to close a session in the red, and continues to explore all-time highs. What's more, PINS options began trading today -- here's how investors are speculating on the social media stock's future.

Pinterest priced its initial public offering (IPO) at $19 per share last week -- higher than the expected $15-$17 per-share range -- but hasn't even come close to that level so far. Specifically, PINS opened on the New York Stock Exchange (NYSE) at $23.75, and hasn't traded lower than $23.05 in its short life as a publicly traded stock. Today, the security is pacing for a fifth straight win, and was last seen flirting with record highs at $28.5, up 6.4% on the day.

PINS stock chart april 25

So far today, about 2,900 Pinterest calls and 2,300 puts have changed hands. Most popular is the May 39 call, though it appears some of that activity is of the sell-to-open variety. Traders writing the PINS calls to open expect the shares to remain south of $39 through the close on Friday, May 17, when front-month options expire.

More "vanilla" bears appear to be buying to open the May 24 and June 25 puts -- the next most-active contracts today. By purchasing the puts to open, the buyers are betting on a PINS decline beneath the respective strikes before the respective expiration dates. However, considering the stock's impressive performance so far, it's also possible that some of those puts are being purchased by Pinterest shareholders seeking an options hedge in the event of a pullback.


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