Stock / Symbol: Twitter / TWTR
Strategy: Put Calendar Spread
Trade entry date / price: 04 Jan 2021 / $54.50
Price at this post: $50.80
Update / Reasoning: TWTR, just a handful of trading days from our position entry, has traded 6% lower already. Thus, our put calendar spread is currently up over 25%. I'm going to enter the closing order here, targeting a gain of 40%. At the moment, the Greeks are: -21.8 Delta, 0.7 Theta, and 6.7 Vega. If TWTR trades back up over $52.50, I will likely adjust the sell order to get an immediate fill.
Trade Exit Order:
STC 1 TWTR 19Mar21 47 put
BTC 1 TWTR 15Jan21 47 put
For a min net credit of $3.30 per contract (GTC order, limit order). The mid is currently at a credit of $2.95. To get filled at this price, TWTR will need to trade further down, to around $49.
Max Risk: $235
Max Reward: $200 or 85% with TWTR at $47 on Jan 15th
Profit Range: TWTR between $42.45 and $52.85 on Jan 15th
Estimated Commission (round trip): $2.60
Upside Stop at: $56.12
Take profits at: $47 to $49
Anticipated Profit / Loss upon fill: $100 or 40% (pre commission)