Jim Strugger's Facebook And Twitter Options Trades

Jim Strugger of MKM Holdings, spoke on Bloomberg Markets about his options trades in Facebook IncFB and Twitter Inc TWTR.

Both companies are going to report earnings this week and Strugger wants to use options to set up a position going into earnings. He wants to buy the October 170/185 calls spread for $4 in Facebook. The trade breaks even at $174 and it can maximally make a profit of $11.

Strugger thinks it would be a good idea for traders with a long position in Twitter to sell the August 22 call and use the proceeds to buy the August 18.50 put. He explained that with the collar, investors can manage the earnings risk.