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PINS Calls Pop After Stock Jumps Again

Lillian Currens

Social media name Pinterest Inc (NYSE:PINS) is surging today, pacing for a second straight day of big gains after research firm eMarketer unveiled data that showed PINS U.S. user base surpassed Snap's (SNAP) Snapchat last year, making it the third largest social media platform. The data also showed the online scrapbook reaches a broader number of age groups. At last check, PINS is up 3.8% at $22.31 -- on track for its highest close since late October. 

The options pits are swarming with activity in response; so far, 57,000 calls and 11,000 puts have exchanged hands -- six times what's typically seen at this point. The January 2020 23-strike call is most popular, followed by the 22-strike call in the same series, with positions being opened at both. 

This preference for bullish bets isn't uncommon. On the the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), 9.37 calls have been bought to open for every put during the last 10 days.

Conversely, short interest shot up 17.9% in the last reporting period, and now represents a solid 17.3% of the stock's available float. As such, some of this recent call buying could be at the hands of shorts hedging against any additional upside risk.

Despite its 22.5% monthly gain, PINS still has a ways to go if it wants to close its post-earnings bear gap, which dropped the stock from the $25 level in early November. That being said, the equity is on course to topple its 80-day moving average for the first time in nearly four months. 

A round of upgrades could push Pinterest higher, too. Right now, 10 analysts in coverage consider the security a "hold," compared to eight who call it a "buy" or better. The consensus 12-month target price, on the other hand, is sitting at the security's pre-bear gap levels, all the way at $26.31.