Demand to Short Twitter
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Last week we looked back on Facebook (FB) and Linkedin (LNKD) post-IPO option flow to gain some insight into what to expect today, and over the next few hours we will see if our expectations are met. Shares have held up very well after the IPO, sticking near the $43 range, or nearly 65% above the initial offering.
Both FB and LNKD saw put volume lead calls and share price slide during their first week- which is not too surprising given that options allow bears to express their downside view without the difficulty of locating shares to short from their broker. Bloomberg reported this morning an estimate that 5% of the TWTR shares were shorted and I was able to find a broker posting an 11.5% rate to borrow shares to short, but once the options prices stabilize we'll be able to see how the synthetic short lines up via puts and calls (also called the reversal-conversion market) to see just how strong the demand to get short TWTR may be.
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