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Twitter Stock Sinks on Political Ad Retaliation

Short-term options look relatively cheap on TWTR at the moment

Managing Editor
Oct 31, 2019 at 10:04 AM
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Just one week removed from its catastrophic post-earnings plungeTwitter Inc (NYSE:TWTR) is suffering another steep pullback today, this time after the company announced plans to ban all political ads from its platform beginning Nov. 22. Twitter CEO Jack Dorsey explained, "we believe political message reach should be earned, not bought," differentiating itself from Facebook (FB) and its CEO, Mark Zuckerberg. Twitter's ban comes at the height of Facebook's legal and social scrutiny for not controlling its own political ads. The equity is down 3.1%, at $28.95 in early trading.

Up until its early September peak of $45.85, TWTR was climbing the charts in 2019. However, following that Sept. 9 annual high, the equity suffered dramatic losses, shedding 30% over the past three months alone. Earlier this month, overhead pressure from the 80-day moving average also guided Twitter stock lower, the perfect storm to produce its aforementioned post-earnings drop.

Despite its recent negative price action, Twitter options traders have been leaning bullish. This is per the stock's Schaeffer's put/call open interest ratio (SOIR) of 0.58, which ranks in the lowest annual percentile. This indicates that short-term options players have never been more call-heavy during the past 12 months on TWTR. 

Regardless, those looking to bet on Twitter stock may want to consider options. The equity's Schaeffer's Volatility Index (SVI) is currently at 34%, which registers in the 8th percentile of its annual range -- indicating short-term options are attractively priced at the moment, from a historical volatility perspective.
Those looking to bet on the tech stock may want to consider options. The equity's Schaeffer's Volatility Index (SVI) is currently at 28%, which registers in the 26th percentile of its annual range -- indicating short-term options are attractively priced at the moment, from a historical volatility perspective.
Those looking to bet on the tech stock may want to consider options. The equity's Schaeffer's Volatility Index (SVI) is currently at 28%, which registers in the 26th percentile of its annual range -- indicating short-term options are attractively priced at the moment, from a historical volatility perspective.
Those looking to bet on the tech stock may want to consider options. The equity's Schaeffer's Volatility Index (SVI) is currently at 28%, which registers in the 26th percentile of its annual range -- indicating short-term options are attractively priced at the moment, from a historical volatility perspective.
Those looking to bet on the tech stock may want to consider options. The equity's Schaeffer's Volatility Index (SVI) is currently at 28%, which registers in the 26th percentile of its annual range -- indicating short-term options are attractively priced at the moment, from a historical volatility perspective.
Those looking to bet on the tech stock may want to consider options. The equity's Schaeffer's Volatility Index (SVI) is currently at 28%, which registers in the 26th percentile of its annual range -- indicating short-term options are attractively priced at the moment, from a historical volatility perspective.
 

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