Sunday, September 27, 2015

Twitter Update #27 (Stock Purchase)

Sep 11

Analysis

Expiration Day. TWTR declined slightly and the hedges paid off slightly from last week.

Trade

Trade 1 - Close off butterfly hedges

-2c Sep 11' 28 Put @ 0.62
+4c Sep 11' 26.5 Put @ 0.05
-2c Sep 11' 23 Put @ 0.03
Net credit: 0.55/c

P/L from this butterfly hedge: 0.55/c - 0.19/c = 0.36/c
This is brings in $72 cash into the account

Close out the short call position - nearly worthless
+2c Sep 11' 29 Call @ 0.03/c

Trade 2 - New Hedges

+2c Sep 18' 27.5 Put @ 0.89
-4c Sep 18' 25.5 Put @ 0.26
+2c Sep 18' 23.5 Put @ 0.09
Net Debit: 0.46/c

To finance the butterfly

-2c Sep 18' 29 Call @ 0.41

Net debit for the new set of hedges is: +0.05/c

-End