Iron Condor on TSLA

Pekelo

Pekelo

Let's run a test on my strategy outlined here:

https://www.elitetrader.com/et/threads/in-search-of-the-3rd-chord-i-mean-leg.310110/

In short selling IC 3 months out and if one side is tested selling a vertical close to the original price to make it a 3rd leg.

TSLA is at $355.8

Selling IC Sept 15 300/310/400/410 for 4.97 the max. loss is 5.05 so it is risk 1 to make 1...

If in the next 2 months price approaches let's say 400, I would sell a 340/350 put vertical. I know the original IC isn't symmetric but I am more bullish on TSLA until the M3 comes out then bearish, specially after this 20 some bucks pullback...
 
One month to go and the position is at $1.4 so up 70% or so. Stock is at $356.50... Just for the record, the stock has been in the 302-388 range, but faithfully always returning to my middle point.

TT eat your heart out!!! :)
 
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Unless TSLA rallies 25 bucks in the next few hours, this position is expiring worthless, gaining the whole 100% on the BP. Currently $375.5

Let's do another one! Selling the Dec IC 320/330/420/430 for $4.75

This time we will probably cover or adjust just before the Oct 24th non-Earnings date, but still should make a 20% in the next 5 weeks... If the price moves 40+ bucks in this time frame a 3rd leg will be sold to counter act the movement...
 
Here's a simple back test of your strategy. You come closest to selling the 40 delta and buying the 20 delta ones. So as you can see its a winner about one out of two times. I varied the parameters to manage risk and for example bail if you lose more than 100% of the net credit but that cuts out too many winners. Cutting out earnings trades eliminates too many trades and is a loser.

tesla.jpg
 
Well, automatically selling the condors probably wouldn't work, I also backtested it using this year. The stock was just too bullish. But currently the company reached a point were the good news are not coming/far away in the future, but the bad news also aren't here yet. So that means the stock price will be range bound as it was in the last 3 months. I do expect bigger (negative) movement after the earnings, but that is still 5 weeks away.

Although institutions started to give up on Tesla, reading reviews on SA there are still just too many fanboys happy to buy shares when it takes a dip.

Bottom line is, there is also fundamental evaluation behind writing the IC, not just blind strategy...
 
Pekelo said:
Well, automatically selling the condors probably wouldn't work, I also backtested it using this year. The stock was just too bullish. But currently the company reached a point were the good news are not coming/far away in the future, but the bad news also aren't here yet. So that means the stock price will be range bound as it was in the last 3 months. I do expect bigger (negative) movement after the earnings, but that is still 5 weeks away.

Although institutions started to give up on Tesla, reading reviews on SA there are still just too many fanboys happy to buy shares when it takes a dip.

Bottom line is, there is also fundamental evaluation behind writing the IC, not just blind strategy...
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Fundamentals or not... TSLA's chart sure looks like its getting ready to explode up.
Assuming no geo-political BS...It could nip at $400 pretty soon. It is what it is, be cautious on the bear side imo.
 
vanzandt said:
Fundamentals or not... TSLA's chart sure looks like its getting ready to explode up.
Assuming no geo-political BS...It could nip at $400 pretty soon. It is what it is, be cautious on the bear side imo.
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TSLA close 350.74 Friday, September 22 2017. Drop 15.78% in 1 day. It may implode or blow itself up, if that's what you mean...
 
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