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Dan Nathan's Bullish Options Strategy In Twitter

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Speaking on CNBC's Options Action, Dan Nathan said that he bought Twitter Inc (NYSE: TWTR) last 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 because it is not clear what an activist could do for the company. He named Google Inc (NASDAQ: GOOGL) (NASDAQ: GOOG) as a possible buyer because Twitter 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.

 

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Posted-In: CNBC Dan Nathan Options ActionOptions Markets Media

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