In less than two days, options will begin trading on Twitter (TWTR), but many are already betting on the stock's downside using other instruments

Jay Soloff

Argonath Financial

In less than two days, options will begin trading on Twitter (TWTR), but many are already betting on the stock's downside using other instruments. According to Bloomberg, structured product investors in Europe are betting heavily on TWTR's decline. Of the products listed on European exchanges that are tied to Twitter, 9 of the 10 most traded securities are put warrants. The warrants suggest the price of the microblogging giant will drop below $28 by June. Apparently, investors are concerned about the profitability potential of the company, which isn't likely to begin turning profits until 2015. While I agree that TWTR shares appear to be overpriced, I also think it's a mistake to be overly concerned about profits. At this stage, customer and revenue growth should be front and center. It will be interesting to see what data comes from the options market. (VIEW LINK)


MORE ON



2 topics

Research Analyst
Argonath Financial

I'm an investments analyst for a US-based independent investment research firm. My focus is on economics, options, and all types of stocks, but especially tech, Internet, and renewable energy companies. I have experience as a options market...

Expertise

No areas of expertise

I would like to

Only to be used for sending genuine email enquiries to the Contributor. Livewire Markets Pty Ltd reserves its right to take any legal or other appropriate action in relation to misuse of this service.

Personal Information Collection Statement
Your personal information will be passed to the Contributor and/or its authorised service provider to assist the Contributor to contact you about your investment enquiry. They are required not to use your information for any other purpose. Our privacy policy explains how we store personal information and how you may access, correct or complain about the handling of personal information.