Weekend Trader Series
November 3, 2024
Open Positions Update
- Please extend the scheduled time-stop date on the Toast (TOST) January 17, 2025, 25-strike call to Monday, November 18.
- The Fortinet (FTNT) December 20, 2024, 77.50-strike call reaches its time-stop this Monday, November 4. Close the position at a limit price within range of the current market price when you place the order.
The following is this week's recommendation:
Twilio (TWLO)Place a limit order to buy the Twilio (TWLO) January 17, 2025 82.50-strike call at a limit price within range of the current market asked price when you place your order. At the close on Friday, November 1, this option was offered at $7.30. TWLO closed at $84.84 on Friday, November 1.Do not attempt to enter this position after Monday's close.Please use the following guidelines to manage the position:- Exit the position if the option is at a 100% gain from your entry price.
- If the option has not reached its target profit by 3:00 p.m. Eastern time on Monday, December 2, close the position.
- If there is a change to the above closeout parameters, we will notify you in your regular Sunday evening communication.
Shares of Twilio (TWLO) gapped higher on the charts after the company reported better-than-expected earnings, as well as guidance above consensus estimates for the second quarter in a row. What’s more, the equity jumped to a 52-week high, and above the $80 level, which was home to multiple peaks over the past couple years. With this in mind, we’re now recommending a new long call on TWLO.
Options traders were overwhelmingly bearish before earnings, and put and call adds were about equal after the report, which suggests there’s not a lot of enthusiasm amongst options spectators. Adding to this, total call open interest (OI) is lower than 63% of readings from the past 12 months, and implied volatility (IV) is lower than 80% of annual readings.
Analysts are also pessimistic, despite Twilio stock’s 69% year-over-year lead. Specifically, 16 of 32 covering brokerages rate the security a “hold” or worse. Should some of this pessimism begin to unwind, TWLO could see tailwinds.
Our recommended January 17, 2025 82.50 strike call has a leverage ratio of 7.6, and will double on an 14.4% rise in the underlying shares.
Most Recent Recommendations
The information contained herein is intended solely for the individual subscribers, is not intended for institutional investment organizations, and is not legal to be rebroadcast. Please click here for full disclaimer details.
Limitation on Schaeffer's Investment Research (SIR) liability: SIR liability, whether in contract, tort, negligence, or otherwise, shall be limited in the aggregate to direct and actual damages not to exceed the fees received by SIR from Subscriber. SIR will not be liable for consequential, incidental, punitive, special, exemplary or indirect damages resulting directly or indirectly from the use of or reliance upon any material provided by SIR. Without limitation, SIR shall not be responsible or liable for any loss or damages related to, either directly or indirectly, (1) any decline in market value or loss of any investment; (2) a subscriber's inability to use or any delay in accessing SIR website or any other source of material provided by SIR; (3) any absence of material on SIR website; (4) SIR failure to deliver or delay in delivering any material or (5) any kind of error in transmission of material. SIR and Subscriber acknowledge that, without limitation, the above-enumerated conditions cannot be the probable result of any breach of any agreement between SIR and Subscriber.