Ways to Trade the Twitter IPO

According to an updated SEC filing, Twitter raised its IPO price range to $23 - $25. $TWTR plans to sell 70 million shares raising ~1.7 billion at the range’s midpoint.

With the huge popularity and notoriety of the name, it is unlikely that many active traders will get their hands on shares at the offering price, but is there a way to trade this stock once it opens to the public? Some are easy, others aren’t likely to be available to you, but here some potential plays.

Stay Long

The same thesis for going short also works for going long. Especially if the stock doesn’t make a huge jump at the open and appears to be slowly moving higher, going long for the day or longer could be a lucrative play. Just as the outsized volatility could work in your favor in a short position, it could also work as a long position.

No Options Available

Each exchange determines how soon options will be available on an IPO. For a stock as large and public as Twitter, it’s likely to be fast—as quick as a week but that doesn’t help you on the opening day.

If shorting and options trading aren’t practical strategies, what can you do?

Trade Related Names

The popularity of Twitter will bring more attention to the social media space and that could cause a short term move higher in those second derivative plays tied to Twitter. $FB, $LNKD, and Chinese media company $SINA are likely to see buying interest. Go long or use options. Don’t blindly throw money at these names, though. Look at the charts and see if they’re due for a bounce.

This commentary is intended for informational purposes only.   This commentary does not represent the views of Lightspeed Trading, LLC or any of its employees.   The content should not be construed as recommendation or a solicitation to buy, sell, or hold any securities.