Tuesday, December 30, 2014

* Twitter (TWTR) - The Option Market is Underpricing Risk in TWTR Stock

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TWTR stock is down 45% in the last year, while at the same time, the forward looking risk (IV30) is also down from 92% to 50%, or a 45% decline. Looking to an even shorter time frame, TWTR is down ~20% in the last two-months while IV30 has remained essentially flat.

Here's a tweet and a chart that say it all.

So the question becomes... Is the option market underpricing risk in TWTR?

This is trade analysis, not a recommendation.

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