[Options] Musk revived to buy Twitter. Here is how to trade!
Last night, Twitter announced that Elon Musk revived a bid to buy for Twitter at the original price of $54.20 per share.
Twitter shareholders voted Sept. 13 to accept the buyout offer as Musk submitted it. The company said at the time that 98.6% of the votes cast were in favor of the deal. That means the deal price of $54.5 is almost the final price.
Usually, before the transaction closes, the market price will be a discount from the deal price, that is, Twitter's stock price will not exceed 54.5 in a short term. So we can start to sell Twitter's call options.
I will trade it tonight, Sell Twitter's Call with the strike price of $52-54. I choose prices that is 95% of the deal price. If you are risk averse, Sell Call with the strike price of $54 or $55.
If Twitter stock price falls below $50, I will sell put options with a strike price of $43-44, which are 80% of deal price.$Tesla Motors(TSLA)$
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
Musk Revived to Buy Twitter