Earnings Beat TWTR Trade
Good day Insiders,
The social media company Twitter is set to report earnings tomorrow before the open. To be completely honest I am of the opinion the stock is not going to move all that much. Implied volatility is at a prime 167% giving us an expected move of +/-$4, at the time of this update the stock is trading at $34. Our potential targets are $30 on the downside and $38 on the upside. We are going to use only 2 pieces in this trade. The buying of a call spread and the buying of an unbalanced butterfly. We are going to utilize the inflated volatility levels and two full trading days ahead.
Buying the call spread as piece 1 and buying the unbalanced butterfly as piece 2.
Risk & Reward
The 2 pieces combined will use $5,700 in margin. Our breakevens in both the downside and upside are 27.50 and 38 respectively. In the event there is no movement, we have $900 at risk but we will find a way to get that back before Friday’s expiration.