TWTR Analysis

Twitter Inc. (TWTR)

Update 7/31/2017: TWTR gapped $2 to the downside after earnings were published and over the ensuing two trading as lost an additional 50 cents. I exited for a loss as earnings approached.

Shares declined by 16.6% over five days, or a -1,210% annual rate. The options position produced a -42.3% loss on debit for a -3,086% annual rate.


TWTR publishes earnings on Thursday before the opening bell.

I shall use options that trade for the last time nine days later, on Aug. 4.

Implied volatility stands at 57%, which is 6.1 times the VIX, a measure of the volatility of the S&P 500 index.

TWTR’s IV stands in the 50th percentile of its annual range and at the peak of its most recent broad movement.

The price used for analysis was $19.79.

Premium: $1.98 Expire OTM  
TWTR-iron fly Strike Odds Delta
Long 24.00 92.0% 10
Break-even 44.00
Short 20.00 56.1% 49
Puts
Short 20.00 43.6% 51
Break-even 17.98
Long 16.00 91.5% 6

The premium is 50% of the width of the position’s wings.

The risk/reward ratio is 1:1.

Decision for My Account

I have entered an order on TWTR as described above. The stock at the time of entry was priced at $19.76.

By Tim Bovee, Fukuoka, Japan, July 26, 2017

Disclaimer

Tim Bovee, Private Trader tracks the analysis and trades of a private trader for his own accounts. Nothing in this blog constitutes a recommendation to buy or sell stocks, options or any other financial instrument. The only purpose of this blog is to provide education and entertainment.

No trader is ever 100 percent successful in his or her trades. Trading in the stock and option markets is risky and uncertain. Each trader must make trading decisions for his or her own account, and take responsibility for the consequences.

License
Creative Commons License

All content on Tim Bovee, Private Trader by Timothy K. Bovee is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

Based on a work at www.timbovee.com.

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