While I think they might meet their revenue estimates, I think Twitter's outlook is going to be abysmal - users are simply not tweeting as much anymore, apart from during huge events like the Superbowl or World Cup.
I got myself about ~20 TWTR 15.50 puts expiring next week. Watch me burn my $ away!
Posted Feb 5, 2016, 7:38 PM UTC
Sell volatility.
16% expected move... eeee scary... after what they did to QQQ this week... ehhh, I'm tempted to hop in for a trade if she gets down to 12 ish... I wouldn't believe I'd be saying that, but this market is looney toons.
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devil's advocate:
I mean, they have 5 bucks a share in cash, and relatively little debt.
At some point their free fall has to stop based on fundamental value. I wouldn't bet on it having a whole lot more downside left in it.
$YHOO is worth less than zero if you exclude its stake in $BABA, so I definitely wouldn't be surprised if $TWTR drops like a sack of bricks on top of the sell-off the past few days.
Markets are irrational...and add to that the recent executive exodus, stagnant userbase, limited product innovation ("Moments", anyone?), and a CEO who's stretched to the limits with heading another public company...I simply can't see any positive outcome for $TWTR.
The only way I can see $TWTR get out of its slump would be if it lays out "strategic alternatives'.
I mean, they have 5 bucks a share in cash, and relatively little debt.
Their "earnings" per share was -$0.86 last quarter. At that rate they'll burn through $5 in under 18 months. You don't see any downside there?
Picked up March puts for .75 for 13 strike. Don't give a fuck. Moon or bust.
Actually this is what I'm contemplating on doing.
I bought FEB2 15 P's last week.
I also have no idea what I'm doing.
Part of my portfolio http://imgur.com/a/tYGC2
What app do you use friend.
Schwab
thats the schwab app
Facebook users are not poking as much anymore. Maybe buy some FB puts while you're at it.
Probably a bad trade. As of right now market is pricing in almost a 10% move between now and next Friday.
Theta = -.088 (this is going to accelerate)
IV Rank = 100% (gonna get crushed on this)
I'd be really surprised if these are profitable. At the very least you should have waited to buy the weeklies (you bought before the weekend for earnings on wednesday?!!) or buy further out.
Overall: retard/10
If I want to yolo TWTR earnings on the assumption that it's going to tank, what's the best play? Short the stock before ER at 355pm, buy OTM puts at 355pm expiring 2/12?
Well it depends on the level of yolo you want and the amount of capital you'll put up.
Ultra Yolo - at 3:50PM before earnings buy a LOT of out of the money (2-3 strikes) weekly puts. For these to work out twitter is going to have to swing 15-20% but they will pay off big. The chance of this working out however is very very low. Don't buy these ahead of time because you will waste money on theta burn. Very likely this position will be worth zero.
Medium Yolo - Buy ATM Weeklies at 3:55PM right before earnings. This is just a binary play as well.
Kinda yolo but most capital intensive - Buy some ITM March puts (maybe 0.7-0.8 delta). You will make the most money PER PUT with these, however the puts cost a lot more then deep out of the money. This is less risky but more capital intensive.
Just remember with all of these, the market is pricing in a very big move (10%+), so the stock will have to move a lot to make any money on the first 2 strategies.
Thanks for taking time to type this up. If I'm thinking just 10% movement down maybe just short the stock before ER?
Edit: If i put a stop like 3% above the stock and good news comes out and it goes up similarly to FB, what are the chances that my stock sells? In this market even fb and goog who had great earnings and went up for dragged down afterwards
Just saw your edit on the stop: This won't help if the stock gaps up overnight (since earnings is after hours). Say you set your stop at $16 and it jumps to $20, when the market opens your going to get filled at the $20. Like what happened to this guy back in november.
You can do that for sure. Just be very careful with a short. TWTR has been really underperforming, so it would not take much good news to make the stop jump significantly. I personally would not short, but it's up to you.
IMO If you want to gamble, buy some ATM weeklies right before earnings and spend as much as your willing to lose (i.e assume the position will go to zero). Your likely going to get fucked by the drop in IV but its better than blowing up your account.
For the ultra yolo, what's reasoning behind buying different strikes instead of just 1 strike?