Buy Alert: January 15, 2016

| January 15, 2016

Buy Alert:  January 15, 2016

 

Trade Details

Buy Twitter (TWTR) February 19th 20 Calls for $1.10 or better (lower)

 

Why?

We are going to do a put trade soon, I promise.  However, I hate buying puts on big down days because the prices get jacked up due to volatility.  Also, the market is being irrational right now and we need to take advantage.  TWTR isn’t undervalued in an absolute sense, but social media stocks tend to trade at a much higher valuation than other industries.  Moreover, the company is still flush with cash and is growing earnings and revenues.

Let’s buy February calls.  Conservative investors can take profits at $22.  Aggressive investors can hold up to $24.  For risk control, conservative traders should exit at $16.50, while more aggressive traders can hold down to $15.

 

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Category: OTW Buy Alerts