Dude buys 150k Jan TWTR calls

Discussion in 'Trading' started by arbs-r-us, Dec 26, 2013.

  1. vanv0029

    vanv0029

    I totally missed Friday's TWTR 10 point (14%) tank, but I did get back
    quite a lot of unrealized losses from selling wide TWTR strangles at lower
    prices.

    I think there may be another explanation for the Thursday large 85 and
    above call buyer. Namely, the trade was part of a giant Cottle book style strangle.
    Sell the wings then scalp the movement inside (Cottle usually uses a Swiss Franc
    example for this type of strangle). The call buyer may have made huge
    profits from Friday's TWTR price action by scalping with a strong downward
    bias. There were scalping opportunities until the the share price break
    down starting around noon.

    This explanation assumes that the exchange reported volume of 60 million
    shares is way lower than the actual (dark pool?) volume. Still such a scalp
    would be huge versus a float of 284 million shares (Motley Fool thinks only
    11% of the authorized 555 million share are available for trading).

    I think my various 50s area bull put spreads are going to start lossing money
    next week.
     
    #91     Dec 29, 2013