TWITTER: Twango On A Special Situation (+50%)
Let's Bring That Dance To An End.
TWTR’s share price plummeted, and so did the 55 Call Jan 2024.
The overall situation stays volatile.
Trade exit with a 50% return on capital is fair.
1. Recap Situation
Three weeks ago, I was ranting about the stock promoter and Amber Heard
supporter victim Elon M., better known for his Tesla enterprise, front-running a Twitter Long I just had engaged in. Not a bad move to use his, back then, P/E GAAP (FWD) 120x valued Tesla stock sales to go shopping and secure some free speech. With Jack D. out of the way, a realistic endeavor, in my opinion.
I highlighted four potential scenarios of how this transaction might go down. In all four scenarios, it was reasonably safe to say that any Call option above the offered 54.20 price per share should be worthless. However, the 55 Call option in Jan 2024 was still richly priced with 2.04, so we sold it and hedged the trade by going long the 55 Call in Sep 2022 for 0.69. As a result, we collected a total credit of 1.35.
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