Will Twitter Hit $70 by 2020? Someone Sure Thinks So…
Somebody with deep pockets seems to know something about Twitter, and they’re betting big on it. An opportunity for smart traders?
As you read this, shares of Twitter (NYSE: TWTR) are trading at $31.25.
The stock has traded as low as $17.03 – and as high as $47.79 – over the last 52 weeks, while gaining 57% over that period. That’s quite an impressive run. But based on today’s options activity, someone with very deep pockets thinks Twitter will go much, much higher.
Check this out…
Over the course of the afternoon – all while Twitter was falling – the following trades crossed the tape:
- 20,000 Twitter January $70 2020 calls were bought for $0.55 – for a total of $1.1 million.
- 30,000 Twitter January $70 2020 calls were bought for $0.55 – for a total of $1.65 million.
- 10,000 Twitter January $70 2020 calls were bought for $0.55 – for a total of $550,000.
So, in three separate transactions, $3.3 million was spent on long-term, out-of-the-money Twitter calls – all in the belief that Twitter would trade at (or above) $70.55 by January of 2020. That’s a massive bet – considering that Twitter needs to gain 125% over the next 14 months for those trades to pay off.
All told, an astounding 86,790 of the Twitter January $70 2020 calls are currently being held in open interest. That means that someone has bought them and is still holding them. In short… wow.
A quick look at the weekly Twitter chart shows you just how far Twitter has to move for this position to pay off. Never in history has Twitter ever traded that high – and yet right now someone is making a big, big bet that it’ll explode by 2020.
Whether this deep-pocketed insider is right or wrong is anyone’s guess. Do they know of a takeover in the works? Some other major event? Who knows?
But one thing is crystal clear: They believe Twitter is about to move aggressively higher – and they’re putting millions of dollars behind that belief. As traders, this sort of bet is most certainly something that’s worth tracking – making it an ideal “Sharp Paper Insiders” article for you today.