Morning Options Sellers. Its hard to find good premium these days with the absolute volatility crush this past month, however I like this play in Twitter. Sell the May 21 16-delta strangle in $TWTR for $222 in premium per one-lot. That means selling the 85 CALL and selling the 60 PUT. Delta at position opening here is actually flat to slightly bearish, but starts out with $8.65 dollars a day in theta decay... nice.
I still think Twitter is way undervalued and there are so many feature they can add to the platform to draw in more revenue, so I'm actually bullish the stock long term. But until May, I say the price stays within range. Collecting $2.22 in premium means our break-evens on this strangle are $57.78 and $87.22.
As this price moves and starts to test either of our strikes, be ready to roll up or roll down the untested side to collect more premium and adjust those break-evens. We'll see how it plays out, but I like the play here with TWTR IV Rank of 40.2 today.
I still think Twitter is way undervalued and there are so many feature they can add to the platform to draw in more revenue, so I'm actually bullish the stock long term. But until May, I say the price stays within range. Collecting $2.22 in premium means our break-evens on this strangle are $57.78 and $87.22.
As this price moves and starts to test either of our strikes, be ready to roll up or roll down the untested side to collect more premium and adjust those break-evens. We'll see how it plays out, but I like the play here with TWTR IV Rank of 40.2 today.