Twitter - TWTR

Question

I have been selling puts to try and 1) get income, but more importantly 2) build a position. I keep selling the puts at support (around the $33-$35 level and as high as $36) however I have yet to be put any shares as it keeps closing out-of-the-money, which is fine because I am making 4-6% roughly on my money monthly.

Problem: I actually want a position.

Not going to waste my time saying why, but for many reasons listed in the below article written by an early-on investor, Chris Sacca, whom is one of the smartest, most forward-thinking VC's out there.

https://lowercasecapital.com/2015/06/03/what-twitter-can-be-2

There's also a newer article he wrote:

https://lowercasecapital.com/cables

bottom line:

for all of these reasons and also because they will soon announce their new CEO, whom I have no doubt will make a huge splash, not only with investors but also PR-wise.

I am going to purchase 1000 shares by EOW and I am also going to write 10-20 puts for next month expiration at $36-$40, depending on the ROI %.

I'd suggest any one that has a short- or long-term timeframe take a look at TWTR. Could be a good bounce short-term trade and/or a great long-term play.

I'll update as soon as a I buy the underlying and if/when I sell the puts

Cheers, and good luck

pederson16 · Answer

I have been selling puts to try and 1) get income, but more importantly 2) build a position. I keep selling the puts at support (around the $33-$35 level and as high as $36) however I have yet to be put any shares as it keeps closing out-of-the-money, which is fine because I am making 4-6% roughly on my money monthly.

Problem: I actually want a position.

Not going to waste my time saying why, but for many reasons listed in the below article written by an early-on investor, Chris Sacca, whom is one of the smartest, most forward-thinking VC's out there.

https://lowercasecapital.com/2015/06/03/what-twitter-can-be-2

There's also a newer article he wrote:

https://lowercasecapital.com/cables

bottom line:

for all of these reasons and also because they will soon announce their new CEO, whom I have no doubt will make a huge splash, not only with investors but also PR-wise.

I am going to purchase 1000 shares by EOW and I am also going to write 10-20 puts for next month expiration at $36-$40, depending on the ROI %.

I'd suggest any one that has a short- or long-term timeframe take a look at TWTR. Could be a good bounce short-term trade and/or a great long-term play.

I'll update as soon as a I buy the underlying and if/when I sell the puts

Cheers, and good luck

pederson16 · Answer

busy Monday as it was the first day since options expiration so I had a lot of free capital to invest as many of my puts sold expired out of the money.

bought 500 shares TWTR at $35.75 just to get a position. Just buying a stock outright is against my investment thesis but I think it could move in the next month and I wanted a position since my July puts at $35.5 and $34 expired without stock being put to me.

I also sold 5 TWTR $35 AUG puts and 5 TWTR $34 AUG puts. The yield is too great for me to pass up (6.2% and 4.6% respective monthly returns)

pederson16 · Answer

bought 500 shares to dollar cost bag down at $31.25. als sold some $31 and $30 august calls. premiums are just too good to pass up.  I HOPE and PRAY I get put this stock.  This company is a great long term hold. advertising taking off and MAUs will increase.  It will mirror the overreaction of FB to the downside years ago and then an exponential increase once they &#x27;figure it out&#x27;. 3-5 year timeframe and I think we are sitting pretty after buying at these levels.

wallstreetcappers · Answer

I read some of their earnings reports and the MAU's look super fishy and they admit the majority of new users are from that gimmicky thing they tried, not really organic growth.

Also not so sure they are monetizing their new members very well. I really think Twitter is a zero long term. I think it will continue to lose margins and sub growth, and when that continues advertisers wont want much to do with it.

Maybe they get bought out on the cheap but I dont see how this biz model demands any kind of growth PE...

I hope you catch an up move but I really think its a long term fizzle.

CrusCrnshw · Answer

I am still relatively new to the stock world personally. Only in the last couple of years have I truly paid attention and bought stuff. Slowly understanding puts and calls, but still a learning process to truly get it and make money properly.

ive just been able to pick mind blowing stocks like Amba (bought 3 blocks at 30 bucks) type stuff and sold at 100. Its been fun, but none the less I found myself in a huge position in Fitbit at 37.76. Im hoping earnings show what I think is coming on the 5th and this pops...

why are you against just buying a stock?

pederson16 · Answer

Crus, what&#x27;s up bud?  Not against buying stock at all.  As you can see, I have bought TWTR, and own many many others, Especially several stocks in Biotech and other sectors that don&#x27;t have options.However, I can control significantly more stock, using options, for much less money, since options contracts (1) control 100 shares.i.e. Apple, 100 shares would cost $12,500 at $125 /share.  But I can get 100 shares exposure by buying 1 contract.  If I am bullish on Apple, which I am , I may sell a put, to potentially get into the stock AND make income, and/or I could buy a call. Or, if I think it&#x27;s going to $130 by August expiration, I&#x27;d buy a call right now at $130, for instance would only cost me $25. That&#x27;s unlikely a move in 2-3 weeks but you see the point; control the same amount of shares for a fraction of the cost.

pederson16 · Answer

wallstreet, again, respect the opinion, I just completely disagree. They have something completely different that FB, and despite the fact that I do not go on Twitter, nor have an account, EVERYONE i know does and uses it like crazy and I&#x27;m in the married with 2 kids and own a home demographic.... this just shows me how universal it is.  Also, I think it will pick up like crazy during NFL/college and NBA/college seasons when so much &#x27;tweeting&#x27; happens re: news and the leagues.  Whether it is a jump in the short term or a big move long term, I am in and quite confident that it will occur.  Another differentiator is that I also believe that Spencer Stuart will place the CEO quite soon and we&#x27;ll get a bounce simply on that, maybe 10% as Jack Dorsey steps away to just focus on running Square.

Dragon_Slayer · Answer

How many of your short puts are in the money now?Selling puts and buying stock?  Texas Hedging!

wallstreetcappers · Answer

He sold August puts and he is in trouble, the stock is 7 bucks lower than his quoted price, so even with the naked premiums he will be about 20% underwater on the shares.

Selling uncovered in an IRA...I dont think that is allowed very often...in fact I dont know of many places that allow it at all?

Dragon_Slayer · Answer

time to puke.  any idea the strike he was selling?

Dragon_Slayer · Answer

sell any more puts on the pop?

wallstreetcappers · Answer

I am sure his position will work out, he seems willing to get creative by selling puts or covered calls..so unless the market starts dumping again he will probably work his way out of this current spot.

Dragon_Slayer · Answer

this is getting ugly...

sfg8 · Answer

$25 and change tdy..below its IPO....yep it&#x27;s getting ugly....

sfg8 · Answer

$25 and change tdy..below its IPO....yep it&#x27;s getting ugly....

EndTheFed · Answer

TWTR is a bubble, period. Insiders and the underwriters from the IPO 2 years ago have mushroomed the float from 71m shares to nearly 700m... too much overhead supply, and the retail public owns much of it. Plus, it's a cash furnace - myspace2.0

Teens by March, run from this tire fire...

EndTheFed · Answer

faceoff -- by definition, any equity that does not pay a divvy is "speculative"...

mainmanmainman2 · Answer

tech is scary right now

EndTheFed · Answer

mainman, the entire MARKET is in big trouble now... looks a LOT like JAN &#x27;08, except it&#x27;s not even Xmas yet. Only SOME tech can benefit from the coming headwinds, but ultimately it&#x27;s ALL heading lower.

EndTheFed · Answer

$16 by GROUNDHOG DAY?&#xD;&#xA;bwaaaaaaaaaaaaaaaaaaaaaaaaaaaa sell the turd that is the TWITanic already...&#xD;&#xA;I tried to warn you.

Slobbasaurus · Answer

$15 today.Bought 434 shares at market close yesterday.  Will sell at $20

mainman11111 · Answer

scary times

wallstreetcappers · Answer

Yeah I think the only shot for the stock to go back to the levels from the OP's price is a buyout and even then I dont think someone would pay 30 bucks.

I think it would be years until the stock goes to 30 without a buyout, they are not growing earnings enough...up and down user growth does not equate to an earnings trend.

sfg8 · Answer

hopefully TWTR  can turn a profit in &#x27;17 ..if they do maybe there&#x27;s still a chance for buyout..rumor had Softbank as the latest candidate...but who knows ...would seem to fit with more of news/ media outlet  company...disney/ fox/ nbc universal etc..type company...i&#x27;m in at $21 ..plan to hold into &#x27;17...BOLTA

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