jay_beckner

I play poker and trade options, seeking edges from study, reflection and analytics.

#005 TWTR Calls

Trade Details: Bought to open 7 Sep 30th Twitter Inc (NYSE:TWTR) 18 calls for $0.85, $603.73 total cost (44.4% of account), 9 days to go. The trade executed at 12:39:00 when the stock was approximately $18.60.

Potential: Unlimited, but targeting $21 for the underlying stock to exit the trade before expiration. Should TWTR trade below $17.95, or show weakness into the key events tonight (Thursday Night Football - TNF) and Monday (the first Presidential Debate), then reevaluation of the position is prudent.

Thesis: The challenges at Twitter (e.g. stagnant user growth, trolling and negativity, difficult to understand platform) are widely known. This is a season of extremely high platform visibility, and the stock is presenting an interesting technical setup. The stock traded up into TNF last week but sold off after reporting disappointing usage during the event; relative outperformance week over week will be a bullish event. Monday's debate should also bring volume into the stock.

Technically, the shares appear ready to advance. A symmetrical triangle continuation pattern is coinciding with positive looks from the core technical indicators mentioned in previous posts (see below). If the stock gains momentum into early next week, and validates the technical setup, then rolling out to the October monthly options will be considered.

TWTR stock showing a symmetrical triangle continuation pattern.

TWTR stock showing a symmetrical triangle continuation pattern.

With the Federal Reserve rate decision past, and volatility coming out of the markets, the long trade feels "too easy" (e.g. the long oil and ADR trades). But, so far demand for U.S. equities appears solid. 

#005 TWTR Calls Closed Profit

#004 FIT Calls Closed Profit