Twitter's stock price is not happy. The unleashing of Twitter options this morning appears to have created a need to sell the underlying (after yesterday's exuberant pre-options jump). Over 1 million lots (100 million shares) have changed hands already in Twitter across all maturites but perhaps most notable is the demand. At-the-money implied volatility (an apples-to-apples way of comparing options 'costs') is around 50% for a December maturity which compares to 40% for Facebook options of the same maturity. It seems more than a few of the IPO owners are looking to hedge (as puts are notably more "expensive" than calls).
- FB Dec Calls 39.75%, Puts 39.92%
- TWTR Dec Calls 49.02%, Puts 50.76%
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