Twitter Earnings 7/29/14

Twitter reports earnings tomorrow after the bell.  Much like Facebook last week, I think Twitter is going to make a significant move after the report.

Last week Facebook broke out to fresh record highs after its earnings report.  Buyers of the call contracts, sellers of the puts contracts, buyers of the stock, made out very well.  What type of trade if going to work for Twitter's earnings report after the bell tomorrow?

The market is pricing in an over $4 move for earnings, or over 10%.  I like the chances of that happening, the question is will that move be 10% to the upside or 10% to the downside?

$TWTR will post a 13-15% move to the upside tomorrow and put the stock back up to recent levels at the $43.50 level before weeks end.  Call me crazy and let the record show I have been wrong on Twitter before.  I am also not the perfect trader.

With the market pricing in a big move , a 13% spike isn't going to line your pockets with gold.  In this case you are better served going long the stock.  However the risk with that trade is should Twitter miss and the stock plummets, you will be on the hook for sizable losses.

My trade for tomorrow will be a small position in the $41 strike at $1.00, or less.

The $43 calls would need that 13% move just to double and 15% to triple in value.

Should Twitter move 7% or less my calls will likely drop in value over 80%.  It is a high risk trade.

Facebook has left Twitter in the dust.  Look at a chart of the two:


Since the lockup drop for TWTR, the stock has been lagging Facebook.  I think a the stock will pop tomorrow after the bell and start catching up to Facebook.


My possible trade tomorrow

$41 calls $1.00


Known to most as Uranium Pinto Beans, Jason has more than 15 years under his belt of trading stocks, options and currencies. His expertise primarily lies in chart analysis, and he has a strong eye for undervalued stock. Because he’s got the ability to identify great risk/reward trades he usually enjoys taking the path less traveled and reaping the benefits from the adventure.

He is a co-founder of Option Millionaires, and he is best known for his weekly webinars with Scott, as well as his high level training webinars and charts found in the forums.

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