Sunday, October 11, 2015

Twitter Update #26 (Position Update)

Oct 12

Analysis


TWTR continued to move higher the past week.

TWTR is currently trading at 30.85 and the position is hedged up to the short 30 call strike.

The TWTR position has been now been on for 4 months.

Initial Debit:  The initial net debit for the purchase of stock (200 shares) was done in two parts.

+100 shrs TWTR @ 36.16
+100 shrs TWTR @ 34.00

A net debit of 7016 to purchase 200 shares stock (avg price 35.08)

Current value:

The current value of the hedged TWTR shares is 200 X 30 + 10 X 30.85 = 6,308
The break even price is 33.41/shr

The current position debit is 6981, just slightly below the initial debit price.
The difference is due to the option hedging which has reduced cost slightly by acquiring +10 more shares. The position also had to release -23 shares due to a margin infraction during Aug, all of which were acquired through hedging. With those shares the position would essentially be at breakeven.

-End