Microsoft confirmed last week that it also discussed the possibility of acquiring TikTok, which could potentially cause problems for Twitter in its pursuit of the popular social sharing app. However, Twitter options activity during Monday’s session painted a very optimistic picture about the possibility of making some sort of deal.
“We have seen the average daily call volume double, with nearly 160,000 calls exchanged. Most of them were short-term: the 38, 39, and 40-shot calls going out until the August expiration, ”said Michael Khouw, chief investment officer at Optimize Advisors. Monday on “Fast Money”.
The August expiration is just two weeks from this next Friday, which fits well with the amount of time Twitter would need to close a deal to buy out TikTok, which may indicate that these traders are betting on speculation for warm up as a ruler of September 15. the order deadline is approaching.
“The buyers of those 40 calls were paying around 75 cents,” Khouw said, “It would be a bet for the stock to go up by about 8.5%, but it’s understandable why they’re using options. [to make that bet]. Option prices are relatively cheap on Twitter. … This is one way for these investors to speculate on this, but without risking much. ”
Twitter shares were slightly higher in Tuesday’s session.