TWTR/Craigs – Well, 305M active monthly users and just $2.2Bn in revenues is pathetic. So pathetic that I feel like quitting here and taking over that job because almost ANYTHING I do will improve that metric and reap me mega millions in bonus money. That being the case, I have to believe that they will, eventually, stumble on to something that makes them money. TWTR generating $7.2 per user while FB, with 1.5Bn users and $18Bn in revenues is at $12 per user but FB is at $312Bn while TWTR is at $10.4Bn so either FB is way overvalued or TWTR is way undervalued or a little of both but that's enough to sway me to take a poke on TWTR.
We don't have TWTR anymore so let's take a poke here in the OOP (10 contracts) and the LTP (40 contracts):
- Sell 10 TWTR 2018 $13 puts for $3 ($3,000)
- Buy 10 TWTR 2018 $10 calls for $6.75 ($6,750)
- Sell 10 TWTR 2018 $18 calls for $3.30 ($3,300)
That's net $450 on the $8,000 spread that is currently $5,000 in the money (or 4x in the STP) and our obligation is to own 1,000 shares of TWTR for net $13.45, which is 10% below the current price.
ThinkorSwim says the net margin on the puts is just $2,400 so a very margin-efficient trade as well.
