$TSLA trades for earnings

 

21 oct

-some of you have been following along with my recent selling short term / weekly calls on TSLA and making some good cash. to recap, have 5 jan2022 DITM long calls and selling 5 weekly calls against them. went into todays earnings with short weekly 430, 450 (x3) and 452.50 strikes. two of the450s were added today as they were trading near $10 in premium with stock near 430. 

an up move would be fine, flat would be fine, down a little fine, but down big as in more than the expected move would not be cool. so in order to get some cheap protection i looked at the level that many were looking at near the low at 351ish.. so i bought a 3 lot of weekly 350puts for .58per.. thought was in case a knee jerk selloff, possibly on a odd metric, or conference call off the cuff comment that would trigger the algos that these puts would do a 5x or so spike and can exit quickly in the morning and soften the blow of the selloff. plus .58 is cheap. dont want to pay alot for this asteroid insurance.

also the price action and my twitter stream wasnt outright bearish but lacked the over bullish hype as before. was more focused on the fundamentals of number of deliveries and EPS. a Mike Khouw hit on FM also mentioned significant selling of the weekly 450s for premium. (i already had one and a 452.50) . got the feeling that the big up move had already been priced in (a move less than the expected move) hence my tweet about a flat reaction. 

but to guard against a selloff even more with minutes to go i entered into a weekly 380/360 1x2 put ratio for .03debit. the ratio profit range at friday opex would be 340-380 .. if it drops below 350 then my 350puts from yesterday are gaining. i did not try to figure out a breakeven of the ratio AND the 3 puts if stock broke down AND the near max premium from the 5 short calls. a possible plus to a breakdown was a possible short put entry even lower.

that was the thought process. get a gain on the ratio and puts if a selloff happens but for cheap cheap.

now that earnings have hit, looks like good metrics across the board and stock was between 430-440 after hours. i will close out either just one of the short 360puts to regain my buying power and leave the 380/360 debit spread as a lotto or close the whole Put ratio likely for pennies in the morning. leave the 350puts as lottos since likely just worth pennies and see how all the short calls price out, best case mainstream Joe SixPack who is not trading after hours will buy in the morning and a couple analysts stroking each other to get the first and or the street high upgrade and get the stock to near 450 in order to get a better roll.. will see how the pricing looks tomorrow. would like to roll at or slightly above the 460 area as a minimum. will look at next weeks opex first. goal is to get at least $10 credit per contract for a roll out, if i can gain a strike or two that would be gravy.

will also look at :

-at least one short call 2 weeks out

-possibly one short call 45or so days out per some recent tweets ive mentioned about where the sweet spot is for premium decay

hope you guys made some coin too. it works till it doesnt