Trade Alert - (TWTR) July 2, 2020

When John identifies a strategic exit point, he will send you an alert with specific trade information as to what security to sell, when to sell it, and at what price. Most often, it will be to TAKE PROFITS, but, on rare occasions, it will be to exercise a STOP LOSS at a predetermined price to adhere to strict risk management discipline.

Tech Trade Alert - Twitter, Inc. (TWTR) – BUY

BUY Twitter, Inc. (TWTR) July 2020 $26-$29 in-the-money vertical BULL CALL spread at $2.66

Opening Trade

7-2-2020

expiration date: July 17, 2020

Portfolio weighting: 10%

Number of Contracts = 37 contracts

Social media has gotten battered the last few weeks with data theft artist Mark Zuckerberg refusing to change his platform’s rules resulting in a broad-based ad boycott.

Twitter (TWTR) still has problems, but I do think the bad news is in the price for the short-term and willing to execute a call-spread at this price.

Aggressive traders can move up their strike price half a point. Tech is so overbought and social media companies are one of the few tech stocks that have a trade in them without chasing.

Twitter sold off from $37 and this short-term call spread will take maximum profits if the underlying stock stays above $29 in the next 16 days.

That’s a bet I am willing to make.

If you don’t do option, take a pass on this one.

Here are the specific trades you need to execute this position:

Buy 37 July 2020 (TWTR) $26 call at………….…...……$5

Sell short 37 July 2020 (TWTR) $29 call at………….$2.34

Net Cost:……………………..……............………..…….....$2.66

Potential Profit: $3.00 - $2.66 = $.34

(37 X 100 X $.34) = $1,258 or 12.58% in 16 days

To see how to enter this trade in your online platform, please look at the order ticket below, which I pulled off of Interactive Brokers.

If you are uncertain on how to execute an options spread, please watch my training video by clicking here.

The best execution can be had by placing your bid for the entire spread in the middle market and waiting for the market to come to you. The difference between the bid and the offer on these deep in-the-money spread trades can be enormous.

Don’t execute the legs individually or you will end up losing much of your profit. Spread pricing can be very volatile on expiration months farther out.

Keep in mind that these are ballpark prices at best. After the alerts go out, prices can be all over the map.

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