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Call Spread on TWLO on 7/15/2019

trading channel on $TWLOTwilio Inc. (TWLO) provides a cloud communications platform that enables developers to build, scale, and operate communications within software applications in the United States and internationally.

The company's programmable communications cloud provides a set of application programming interfaces that enable developers to embed voice, messaging, and video capabilities into their applications. 

The firm recently purchased SendGrid. SendGrid provides a cloud-based email delivery service that assists businesses with email delivery. The service manages various types of email including shipping notifications, friend requests, sign-up confirmations, and email newsletters.

On April 30th, Twilio reported a 1st Quarter March 2019 loss of $0.14 per share on revenue of $233.1 million. The consensus earnings estimate was $0.01 per share on revenue of $223.4 million. Revenue grew 80.6% on a year-over-year basis.

The company said it expects second quarter earnings of $0.02 to $0.03 per share on revenue of $262.0 million to $265.0 million. The current consensus estimate is earnings of $0.03 per share on revenue of $253.2 million for the quarter ending June 30, 2019. The company also said it now expects 2019 earnings of $0.11 to $0.13 per share on revenue of $1.102 billion to $1.111 billion. The company's previous guidance was earnings of $0.08 to $0.11 per share on revenue of $1.065 billion to $1.077 billion and the current consensus earnings estimate is $0.10 per share on revenue of $1.07 billion for the year ending December 31, 2019.

Shares are heading higher in an upward trading channel. Shares are presently at the lower boundary of the channel. The 50-day moving average (shown in brown) is supporting the formation. 

Entry Point: $142.00

Trading Range: $55.58 to $151.00

Trade

  • Buy 1 August $140.00 Call at $10.95
  • Sell 1 August $150.00 Call at $6.25
  • For a net debit of $4.70

Profit/Loss Analysis

  • Breakeven at $144.70
  • Maximum profit is $530.00 at strike of $150.00
  • Maximum loss is ($470.00) at strike of $140.00

Closing Summary

  • Sold 1 August $140.00 Call at $14.00
  • Bought 1 August $150.00 Call at $8.00

Position closed on 7/25/2019 at price of $6.00 with a 27.66% gain in 10 days.

Updates

7/25/2019 12:19:31 PM

TWLO call spread closed

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