The Trade Desk is caught in a widening gap between what options traders believe and what the market keeps doing to the stock.
The options story is the sharpest signal this week. Call buyers have rarely been this dominant — the put/call ratio has dropped to 0.477, nearly 1.4 standard deviations below its 20-day average of 0.516 and close to the lowest reading of the past year (the 52-week floor is 0.467). That is a market leaning heavily toward upside optionality, even as the stock fell 9.2% in a single session on June 2 to close at $21.08 and has shed 13% over the past month. The divergence between options positioning and price action has been the defining tension on TTD for the past two weeks — and it has only sharpened.
Short positioning confirms the bears are not adding conviction at these levels. Short interest has edged down to 16.9% of the free float, trimming about 1.4 percentage points from the peak that built up through May in the wake of the Q1 earnings miss. The borrow market reinforces that read: availability has surged to 1,250% — up 78% week-on-week and the loosest the lending pool has been all year, well above the 52-week low of 266%. At that level, roughly twelve shares are available to borrow for every one currently shorted. Cost to borrow has eased further to 0.39%, a multi-month low. There is no squeeze pressure, but equally, there is no new wave of short conviction. Bears built methodically through May; what has changed this week is that covering is showing up even as the stock kept selling off.
The Street has moved decisively toward caution since the May 8 print. HSBC downgraded to Reduce with a $20 target on May 11, one of the more bearish stances among the covering analysts. William Blair stepped down from Outperform to Market Perform. The consensus rating now sits at Sell — a notable shift for a name that had been a buy-side darling in the CTV and programmatic advertising trade. Bulls who remain, led by Truist and RBC, have trimmed targets sharply — Truist cut from $50 to $35 — while still holding positive ratings. The mean price target of $25.34 sits modestly above the current price, though the range has compressed significantly. Rothschild initiated with a Sell and an $11 target on May 28, a data point that anchors the bear case at well below where the stock currently trades. Valuation multiples have compressed in tandem: the P/E has contracted by roughly 3.4% over the past month and EV/EBITDA fell by 0.44x, both moving in the direction of a re-rating rather than a recovery.
Earnings history offers a consistent pattern worth noting. The last two reports both produced negative day-one reactions — the May 8 Q1 print pulled the stock 8.4% lower the following session, and the prior report produced a 3.9% decline. Five-day reactions were worse: the most recent Q1 result dragged TTD down nearly 10% over the week following the release. Q2 results are not due until August 7, leaving time for the current positioning to resolve before the next major catalyst.
Among correlated peers, PUBM gained 14.2% on the week and DV added 10%, while MGNI rose 11.7% — all outpacing TTD's 5% weekly decline by a wide margin, suggesting company-specific pressure rather than a sector-wide move. The next inflection point to monitor is whether the call-heavy options positioning begins to reverse as August earnings approach, or whether the continued price weakness finally starts pulling that put/call ratio back toward its longer-run average.
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