Stock / Symbol: Twitter / TWTR;
Option Strategy: diagonal call spread
Trade entry date / price: 1 Apr / $51.00
Price at this adjustment: $36.10
Current Position:[private_monthly]
Long 1 Jan17 40 call
at an effective cost of $10.24 per contract[/private_monthly]
Adjustment: The July call we sold expired worthless last Friday, enabling us to retain the full premium we collected. Thanks to the volatility due to Twitter's July 28 earnings announcement, we're able to sell a further OTM call now for a healthy premium. This takes the trade from a calendar to a diagonal call spread. The Greeks after this adjustment will be: 31.8 delta, 2.1 theta, and 14.5 vega.
If you're not currently in this trade, you can enter here by [private_monthly]going long the Jan17 40 call and short the Aug 42 call.[/private_monthly]
Trade Adjustment Details:
[private_monthly]
STO -1 TWTR Aug 42 Call
for a min net credit of $0.72 per contract (GTC order, limit order). The mid is currently $0.70.
[/private_monthly]
Max Risk: $952
Max Reward: [private_monthly] ($15) or (1.5%) (at current volatility) at $42[/private_monthly] by Aug 21st
Profit Range: [private_monthly] Currently NA[/private_monthly]
Suggested Downside Stop: NA
Suggested Upside Stop: $44.25
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