Bulls Flock to Last-Minute TWTR Options

The stock has been pushing up against the $30 level since mid-April

Lillian Currens
May 15, 2020 at 1:04 PM
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Though the reasons are not quite clear, social media giant Twitter Inc's (NYSE:TWTR) options pits are buzzing with bulls today. So far, 93,000 calls have crossed the tape -- more than two times the intraday average -- compared to 15,000 puts. Positions are being opened at the May 29.50 call, which expires later today, as well as the weekly 5/22 30-strike call, which is set to expire next Friday. TWTR is trading up 0.8% at $28.78, at last check, meaning some of these traders are expecting more upside for the underlying stock ahead of the close tonight. 

Twitter has, for the most part, been trading in a tight channel between $26 and $30 since early April, with its 140-day moving average thwarting an attempt at a breakout. The 40-day moving average, on the other hand, seems to be cradling the shares, with several pullbacks captured here. The security is off 10.9% for the year, but is still up nearly 5% in the last one-month time period.  

TWTR May 15

A deeper look shows a strong preference for calls in Twitter's options pits of late. In the last 10 days, 5.6 calls were picked up for every put at the International Securities Exchange (ISE), Cboe Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio falls into the 86th percentile of its 12-month range, suggesting a heavier-than-usual appetite for these bullish bets. 

Short interest is rolling over, down 26.2% in the last two-week reporting period to represent a slim 4.3% of the stock's available float, or less than two days at its average pace of trading. 

Analysts, however, aren't so optimistic. Just four of the 24 in coverage call TWTR a "strong buy," while the rest say "hold." Plus, the 12-month consensus price target of $29.66 is just a 2.2% premium to current levels. 

 

 


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