Options Expert: Twitter Upside 'Decent' As Long A 'Major Disaster' Doesn't Occur

Nic Chahine was recently a guest on #PreMarket Prep, a daily trading idea radio show hosted by Joel Elconin and Dennis Dick.

On Benzinga's #PreMarket Prep, options expert Nic Chahine said that Twitter Inc TWTR is a long-term buy with "decent upside potential," at least as long as markets hold up "without a major disaster."

Underlying Chahine's view is that Twitter is "too valuable of an asset" that "somebody will figure" out, whether it is Twitter or an acquirer. "If I give myself time, I can make Twitter work for me long term," Chahine said.

Chahine noted that he is long Twitter via put credit spreads. Specifically, he sold June $32 puts. To cap his risk, Chahine said that he purchased $30 and $31 puts at the same expiration. Chahine will profit if Twitter shares trade above $32 at expiration.

In general, Chahine said that his trading strategy is to pick areas where prices "are not going," and to play that via selling option premium, instead of trying to pinpoint where the stock price is going. Specifically in Twitter, Chahine allowed the stock to fall following its most-recent earnings report before entering the trade. He said this allowed him to "let the knife settle down before trying to catch it."

Chahine noted that the company just needs to figure out its monetization strategy.