Dan Nathan's Bullish Options Strategy In Twitter Inc

Speaking on CNBC's Options Action, Dan Nathan said that he bought Twitter Inc TWTR on Thursday as a bet that it will be a takeover target. Nathan thinks that a takeover is the only strategy that can work in Twitter Inc because it is not clear what could an activist do for the company. He named Google Inc GOOGL GOOG as a possible buyer because Twitter Inc is now increasingly used as a real time search engine. Nathan recommended a risk reversal strategy for traders who want to follow his trade. Specifically, he would sell the March 35 put for $1.80 and buy the March 40 call for $2.10. The set up would cost him $0.30 and if the stock trades above $45.30 he would make money.