Unusual Option Activity: The Trade Desk (TTD)

Digital media advertisement app The Trade Desk (TTD) is up 33 percent over the past year. One trader sees further upside ahead for shares in the coming months.

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  • That’s based on the April $60 calls. With 72 days until expiration, 20,206 contracts traded compared to a prior open interest of 272, for a 74-fold rise in volume on the trade. The buyer of the calls paid $13.40 to make the bullish bet.

    The Trade Desk shares recently traded for around $70, meaning the options already trade $10 in-the-money. The strike price is slightly closer to the lower end of TTD’s 52-week range between $47.68 and $91.85.

    Besides shares soaring over 33 percent in the past year, earnings grew by a heftier 148 percent. And revenues jumped by 25 percent.

    Plus, The Trade Desk still has over $1.5 billion in cash and less than $300 million in debt, giving it a strong balance sheet now.

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  • Action to take: Shares have momentum behind them, and look set to continue higher in the months ahead. That makes for a reasonable buy for investors now.

    For traders, the April $60 calls are a conservative way to play the uptrend in shares. The trade can likely see mid-double-digit returns in the coming weeks.

    More speculative investors may want to look at April call options with a higher strike price.


    Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.

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