Friday, August 28, 2015

Twitter Update #15

Aug 28

Analysis

Expiration Friday! TWTR is trading for 26.80, in between the strikes of the butterfly hedge and the short call. Its looking like both hedges will go out for 0.00 by end of day.

As I had to sell out 23 shares during the market sell off to maintain margin (and the price only traded there for a few minutes - I should have held as the market climbed steadily back) the position debit has decreased slightly.

The good news is that will the rebound, the position has gained value, but is down overall. I will need a few more cycles of hedging and stock movement to hopefully get that back.

With the hedging, the position is still better off by about +300, even with the forced sale of stock. The maximum loss with the hedge in place below is -1238 while the broker position on 200 shares is showing a loss of -1575. Without the sale, the position would be better by another 100.

IV is still high after this week's sell off, so I will be hedging with another butterfly for another week.

Trades

Part 1 - Close hedges

+2c Aug 28' 27.5 Call @ 0.03
-2c Aug 28' 26.5 Put @ 0.17
+4c Aug 28' 24.5 Put @ 0.02
-2c Aug 28' 22.5 Put @ 0.00 (left to expire)

Part 2 - New Hedge
-2c Sep 4' 28 Call @ 0.35
+2c Sep 4' 26.5 Put @ 0.90
-4c Sep 4' 24.5 Put @ 0.31
+2c Sep 4' 22.5 Put @ 0.14

-End