Posted in
Current Events
By: Tom Gentile
on April 4th, 2022
Take a look at the share price of Twitter, Inc. (NASDAQ: TWTR) today.
It is up over 25% thanks to the decision of Elon Musk, CEO of Tesla, to purchase 73.5 million shares of TWTR stock.
That equates to a 9.2% ‘passive’ stake that he is taking in the social media company. As for the transaction cost? That equates to 2.9 Billion… with a B, (based on last Friday’s closing price.
The Term Passive Stake
The purchase is one that is done by his 13G filing. That form / type of filing is done when the acquirer of stock isn’t interested in pursuing an ‘activist agenda.’
An acquisition that shows an acquirer wants to take an activist position is one where they file a 13D form.
NASDAQ Outperforms on the Day
At the time of this writing the NASDAQ is up 235-points or 1.65%.
The Dow and S&P are up today, but not as much on a percentage basis as the NAZ. They are all at their highs of the day and we will see how things finish, but NASDAQ in large part of this deal is the shining start of the three today.
Options Idea on Elon Musk’s Purchase of 9.2% of TWTR
My online tools (www.tomsoptiontools.com) and my tools on my app Toms Option Tools have Twitter options showing up on multiple Options Ranker Scans.
One other list result showing a TWTR options is the Expensive IV List:
Below is a candlestick chart with the 7-149-day ATM Implied Volatility overlayed on it.
This speaks to that option (and likely other TWTR options) showing an elevated IV due to this influx of activity on them.
To execute a buying strategy like going Long Calls would be risky right now.
I’d feel better waiting for the IV to settle down before I look into going that route.
App: Toms Option Tools
Market Insight articles may show images of lists of stocks meeting a variety of options parameters like Unusual Call and or Put activity or Expensive IV found on my app Toms Option Tools.
Other times I will have other charts may work to amplify my educational points.
Those options data lists, however, can be found on my app Tom’s Option Tools. Use your device to search up and download this app and get free access to the Morning Reports section of the app.
Other parts of the app are available at a premium subscription rate, but the Morning Reports Lists are yours free.
Disclaimers
Stock and options trading has large potential rewards, but also large potential risk.
You must be aware of the risks and be willing to accept them in order to invest in the stock and options market. Do not trade with money you cannot afford to lose.
This is neither an offer to buy/sell/ or recommend a particular stock or option.
Hypothetical or simulated performance results have certain inherent limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been actually executed, the results may have under or overcompensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with hindsight.
No representation is being made that any account will or is likely to achieve profits or losses similar to those shown.
Disclaimer of Warranties and Liabilities Tom Gentile and TomsTradingRoom, LLC including employees, consultants, and editors (“Publisher”) cannot and do not warrant the completeness or accuracy of the content found in our areas, or its usefulness for any particular purpose.
Tom Gentile and TomsTradingRoom, LLC also make no promises that our content or the service itself will be delivered to you uninterrupted, timely, secure, or error-free. Under no circumstances will Tom Gentile and TomsTradingRoom, LLC be liable for direct, indirect, incidental, or any other type of damages resulting from your use or downloading of any content on our site.
This includes, but is in no way limited to, loss or injury caused in whole or in part by our negligence or by anything beyond our control in creating or delivering any portion of Tom Gentile and TomsTradingRoom, LLC.
You are agreeing that you bear responsibility for your own investment research and investment decisions. You also agree that Tom Gentile and TomsTradingRoom, LLC will not be liable for any I, investment decision made, or action taken by you, or others based upon reliance on news, information, or any other material published by Tom Gentile and TomsTradingRoom, LLC.
Tom Gentile and TomsTradingRoom, LLC relies on various sources of information that we believe to be accurate and reliable. However, we make no claims or representations as to the accuracy, completeness, or truth of any material contained on our site.
Tom Gentile and TomsTradingRoom, LLC are educational portals, providing content for educational and informational purposes only. Neither Tom Gentile nor TomsTradingRoom, LLC are a broker/dealer. Investors need a broker to trade stocks and options and must meet certain requirements. All securities, futures, and investments data and ideas are offered to self-directed investors. All prices in USD unless noted otherwise.
A full disclaimer can be found here: http://www.tomgentile.com/legal_disclaimers.html.