Pinterest Stock Flashing Sell Signal Right Now

Pinterest Inc (NYSE:PINS) stock is 3.1% higher to trade at $22.08 this afternoon. Despite being headed for a fifth-straight daily win, the equity has seen rejections at the $22 level in both early September and June and now sports a 25% year-to-date deficit. Plus, a bearish signal is now flashing, suggesting October might be the time to buy puts on the social media giant.

PINS sports a 10-day call/put volume ratio of 1.34 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which stands in the top percentile of readings from the past year. Over the last three years, there have been five instances in which the equity's 10-day buy-to-open call/put ratio crossed above 1.0 and moved into the 90th percentile.

Per Schaeffer's Senior Quantitative Analyst Rocky White, the stock was lower one month later 80% of the time after these signals, averaging a 7.7% loss. A move of similar magnitude would place the shares back near $20.

There is plenty of room for downgrades as well. Heading into today, 19 of the 35 covering brokerages sport a "strong buy" recommendation.

These options are affordably priced as well. Specifically, Pinterest stock's Schaeffer’s Volatility Index (SVI) of 61% stands in the 27th percentile of its annual range.