$550 per share is why, Calls for $35 could triple your money with a good earning release with only a $3500 per contract max loss, same move would only make you 20%.
Tesla straddle
- Thread starter Pekelo
- Start date
$550 per share is why, Calls for $35 could triple your money with a good earning release with only a $3500 per contract max loss, same move would only make you 20%.
Well, options are cheaper. If you want to be careful, you still can buy LEAPs. Or if you want to YOLO, just go ATM with Friday expiry and buy the calls before Wednesday.
The trade didn't work because price moved away BEFORE earnings. Still the position buy back only costs 73 right now, so minimal loss.
Had I used the 580 midprice just before Wednesday close where the price was then, that position nicely collapsed to 52 bucks (selling it would have been for around 65) even though Tesla had a huge upmovement.
So good idea, bad timing.
Had I used the 580 midprice just before Wednesday close where the price was then, that position nicely collapsed to 52 bucks (selling it would have been for around 65) even though Tesla had a huge upmovement.
So good idea, bad timing.
Really? The only known is that the vol will rally before the report. Vol as synthetic time.
What a terrible call.
If you sold the same straddle just before earnings for $65 with 580 as midpoint, today you could have closed it for the same. Even my call could have been closed at yesterday's open for break even when price was 635ish.
Was it a good call? Not particularly, but it wasn't terrible.
If you sold the same straddle just before earnings for $65 with 580 as midpoint, today you could have closed it for the same. Even my call could have been closed at yesterday's open for break even when price was 635ish.
Was it a good call? Not particularly, but it wasn't terrible.
I was referring to your comment that vol may drop. And no, you admitted it lost, so what exactly is your argument? Degrees of (your) stupidity?
I am arguing the terribleness of the call. With options a terrible call when it blows up in your face and you lose 3 times what you risked. Buying back for let's say 70 what you sold for 65 isn't such a big deal.
Your logic for taking the trade was fatally flawed.
You shorted a combo in front of a binary event. There was no decay in the straddle which has to result in a rally in the vol-figure. Just stop recommending vol-trades as you're woefully out of your depth.
I disagree. Sure, Tesla tends to move 10%+ on earnings, but pretty much everyone agrees their numbers or any other news didn't justify the move they got out of the current report. My only problem was opening it way too early.
Price of the 580 straddle (where price was) before Wednesday's close was 65. A few minutes after Thursday's open it was around 55, so that position could have been closed with a GAIN.
But you are right, I will only recommend straight calls or puts in the future. Will that make you happy?
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On a slightly related note: Dest, is that you? Do I have to give the gift card to myself?
Your quotes are wrong.
You stated the vol was a short. It wasn't. Vol rose. You lost $ on the trade but are intent on spinning it.
You lost on the gift card as well as I've been gone more than two weeks.
Blocked.