Tuesday, December 10, 2013

Twitter (TWTR) - Does The Option Market Have This One Wrong?

TWTR closed Tuesday trading at $51.99, up 5.8% with IV30™ up 5.0%. The Symbol Summary is included below.

Provided by Livevol

Twitter, Inc. (Twitter) is a global platform for public self-expression and conversation in real time. Twitter is a real-time platform, where any user can create a Tweet and any user can follow other users. Each Tweet is limited to 140 characters of text, but can also contain rich media, including photos, videos and applications.

TWTR's IV60™ and IV90™ are 60.53% and 62.06%.

The company has earnings due out likely in Jan (possibly Feb expiry).  One quick question, did you know these firms all have higher 60-day implied volatilities than TWTR (and this excludes bio-techs)?

Provided by Livevol

Just to be clear, TWTR has lower vol than YELP (huh?) and TWTR has 30% lower vol than GOGO.

Let's see where this stock ends up, and take a snapshot (below) of what the option market reflects.

Provided by Livevol

Look at those ATM straddles... We'll re-visit in a month or two but for now the Option Market reads that TWTR will be in [$47.20, $54.65] on Jan 18. That feels like a tight price range... no?

This is trade analysis, not a recommendation.

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