Finance

Options Trading – Twtr Trade 7/6/17

Options Trading – Twtr Trade 7/6/17.

Yesterday, on July 5th, I did some options trading. By chance, I accidentally saw the stock price of Twitter. Amazingly, this was such a wonderful occurrence. Knowing that Twitter is an undervalued company, and even more so their market value, I jumped at the chance to purchase some call options. Anytime you see Twitter below 18 dollars, do not hesitate to purchase the stock or options. They always bounce back. Options trading can really make you rich. The risk is big. So, tread lightly.

There are several incredible reasons why to buy Twitter stock:

1. It used by many people daily and even on some instances minute by minute.

2. The price is incredibly cheap, when you consider other likeminded companies. 

3. Jack Dorsey is only a part-time CEO of Twitter. So, if he ever decides to become a full-time leader and leaves his other company Square, or relieves himself from duties at Twitter, then this stock will automatically rise.

4. If this company is bought out by, let’s say Google or Disney, Twitter stock will rise like wild. I do not want this to happen though, because a) I believe this company can come out of their coma themselves and b) I will not be able to trade Twitter, which has become my favorite stock. 

Having won my prior trade on Twitter, Twitter Trade 6/21/17, I constantly love to see how everyone bashes this company. Reminds me of a time when Facebook was the most hated stock by almost everyone at one time. Their price was in the teens. Look at them now. Now everyone tries to buy FB stock, overvaluing this tech company.

Sure, it has taken a while for Twitter to get the same results as FB. The problem is that technology evolves so quickly where any wrong decision made will destroy a company and its stock. Luckily, Twitter is not done. They are slowly pulling themselves out of their woes. 

A great lesson here is never go all the way in a decision when you do not have everything ready. It will take a long time to redo your past mistakes.

I bought 81 options for the July 21st 18.00 strike price at an average of .48 at around 12:30pm. The price was 17.78. Feeling very confident, I did not look at the price action. Today, July 6th, I visited the Google Finance page to see how the premarket was doing and the stock was down. Twitter started out at 17.60, and I wished I would have enough time to buy more. Knowing that it would not work, I just put away the phone and got ready for my trip.

As my wife and I were walking towards our destination, I kept calmly refreshing the Google Finance page and saw it rising and rising. Then, when I saw that the stock’s price hit 18.30, I looked at my stock app and saw the options priced at .75. This number, amazingly enough, was the number I envisioned yesterday as my sell price. Luckily, I sold the options at the price of .77. Of course, I knew that the stock might go higher, but missing a profit like this, above 50% in 4 hours of actual trading, would be too much to pass. 

Take your profits! You will be able to continue to trade with this perspective. Good Luck everyone and make some money. Options trading can be scary. Learn to invest first, before rushing towards earning the big bucks.

Check out My Amazon Picks for Options Trading