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I can make five times my money with this ‘unbelievable’ tech bet: Trader

Twitter rose more than 3 percent Thursday, and one trader thinks that the embattled tech stock is set for a short-term recovery.

The social media giant is down 15 percent year to date off of stagnating user and revenue growth. During the second quarter, Twitter added just 2 million monthly active users more than in the first quarter, and third-quarter projections have the company attracting less than 4 million monthly active users. It's no surprise then that Twitter has sought out deals with Major League Baseball and the National Hockey League in a bid to live-stream its way to new users.

But one trader sees at least a short-term recovery for Twitter. Andrew Keene of AlphaShark believes that the stock is headed up to levels unseen since January of this year.

"I think Twitter can get up to about $22 or $22.50 by September expiration," said Keene.

A daily chart of Twitter shows the stock recently breaking through what Keene sees as an "immediate resistance" at $19. The weekly chart also shows the shares gradually rallying from a bottom around $15, giving some indication that Twitter is, in fact, headed upward.


Keene wants to buy the September 21-strike calls and sell the September 22-strike calls for a 20 cent debit, or $20 per options contract. If his trade succeeds, he would see a big reward.

"If it goes to $22 by September expiration, I can potentially make five times my money," said Keene. "That 20 cents would then go up to $1.00."

"I think this is an unbelievable opportunity to get long Twitter in the options market," he added.

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Trading Nation is a multimedia financial news program that shows investors and traders how to use the news of the day to their advantage. This is where experts from across the financial world – including macro strategists, technical analysts, stock-pickers, and traders who specialize in options, currencies, and fixed income – come together to find the best ways to capitalize on recent developments in the market. Trading Nation: Where headlines become opportunities.

Brian Sullivan

Brian Sullivan is co-anchor of CNBC's "Power Lunch" (M-F,1PM-3PM ET), one of the network's longest running programs, as well as the host of the daily investing program "Trading Nation." He is also a frequent guest on MSNBC's "Morning Joe" and other NBC properties.

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