Sunday, October 04, 2015

Twitter Update #22

Oct 2

Analysis

TWTR is looking like it might drop further this morning. To be further proactive in the hedge, I am going to buy back the short spread in the butterfly. This is going to cost money.

If the stock continues to drop, the put spread will gain in value to a maximum of 1.5pts. If the stock rallies, the position will gain 1pt less the cost of this hedge which is now 0.29 - 0.03 = 0.26/c

Trade

+2c Oct 9' 23.5 Put @ 0.34
-2c Oct 9' 21 Put @ 0.05
Net Debit 0.29/c

-End