Twitter Options Start Trading Today

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Nov. 15 (Bloomberg) -- Trade Alert President Henry Schwartz discusses his investment ideas on Bloomberg Television's "Bloomberg West." (Source: Bloomberg)

-- in twitter today, and how does that compare with other ipo's we have seen recently?

We look at basically every single option trade that takes place, and there are about a billion -- a million traded it.

Twitter traded at thousand conference in the first minute, 45,000 in its first hour.

When i was on my way up here, it was in seventh place along technology stocks for options trading, and that is a big deal because technology stocks about a third of technology trades.


It was incredibly busy.

You are seeing kind of what you would expect on the first day of options, listing at such a hot name.

So much media coverage, everybody is paying attention.

There is obviously some kind of pent-up demand to hedge that kind of incredible first day spike, which really persisted.

I think a lot of people want to lock that it if they can.

There are some who can, there are some who were not allowed to based on how the allocation went.

But we are basically seeing what you would expect, which is put out trading calls, the focus is downside put, we saw 43 strike purchases, december expiration.

That was really the only institutional block that we saw, the 2000 block, five minutes into the day this morning, the stock was around $45. the stock is basically slid back.


You have been watching the shortselling in the stock as well, which happened a few days before this, it happened before the options began trading.

There, too, you are seeing people hedge the increase we have seen in twitter by selling this shares soared.

You can short a stock by basically telling a broker they want to sort it, they have to locate it from somebody who has appeared on a new ipo, it is very hard to get that stop because it is basically kind of locked up.

The very first chance to short it was a couple of days after the ipo.

The first one i thought was 99% to short.

If you want to short this, you will pay an annualized rate of 99% to short appeared that will last for a day.

The next day was 12.5%, this morning it was 11%. what is really interesting is you can use options to put on the exact same trait profiles.

You can basically buy a put.

So once the options are listed, you do not need to short shares.

You have an alternative.

It removes that.

But a lot of it we are seeing in hedges.

Thank you so much for coming in, henry.

Appreciate it.

We will be on the markets again in 30 minutes.

"money moves" is next.

This text has been automatically generated. It may not be 100% accurate.


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