Activity in the 21 Feb ’14 expiry call options caught our attention today, with the $75/$85 call spread trading more than 14,000 times within the first two hours of the opening bell. It looks like the spread is being purchased at an average premium of $2.20 each. The bullish trade makes money if shares in Twitter rally 17.5% over the current price of $65.68 to exceed the average breakeven point at $77.20 by expiration, with maximum potential profits of $7.80 per contract available in the event of a 30% upside move in the share price to $85.00 during the next six weeks.
This article will become free after 48 hours (see below for free content). To read the rest of this article now, along with Phil's live intra-day comments, live trading ideas, Phil's market calls, additional member comments, and other members-only features - Subscribe to Phil's Stock World by clicking here.
