An Unconventional Twitter Approach

Twitter (TWTR) isn't making mincemeat of the shorts in December. While its short interest has climbed quickly, so has its price. I still believe it's too difficult to short this stock conventionally. Shorting shares or even buying puts straight up seems too tough here. Even with the weakness Wednesday and this morning, this market is still proving difficult on the short side. I'll take a somewhat unconventional approach to a downside play on Twitter over the next few weeks. I don't think we will see imminent downside, but this squeeze and chase should subside, at least temporarily, which could provide enough of a move to provide a profit.

I'm twisting the normal calendar put spread on Twitter. I'm buying the following ratio. First, I'm starting with five calendar put spreads where I am long the January 17 $52.50 put and short the December 27 of the same strike. Then for every five of these, I am selling two December 27 $52.50-$51 put spreads. The total cost is $6.20. My maximum risk is the premium plus the $1.50 for each of the extra put spreads....160 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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