TSLA Earnings - it pops 10% - up $30.00 during AH.

[elitenapper]

• I would close both legs since you are at maximum reward.
  
• And reconsider debit spreads in the future.
  
• Open new long put position with a strike below 280.00.

Thanks for the reply.

I take it you'd rather trade credit spreads in this case? To take advantage of the high IV premium?

W.R.T. closing the vertical spread trade and opening a new long put position, wouldn't that be roughly the same as simply closing the short leg (buying back the 280 put), and keep the long $300 put (assuming TSLA seems to have more room to fall)?

Thanks.

 

[OptionsOptionsOptions]

I take it you'd rather trade credit spreads in this case? To take advantage of the high IV premium?

No ...... I prefer long positions only. No selling of options at all, no credit or debit spreads.

 

[S2007S]

They are burning through $6500 every minute!!!

Yet people are still paying hundreds of dollars for one share of the company!!!



The company spends more than $6,500 every minute and it has had negative free cash flow for five quarters, according to Bloomberg. It has also tripled its workforce between 2014 and 2017 and its revenue per employee is lower than its competitors in the auto industry.

Tesla tsla has teetered on the edge before. Since it was founded in 2003, the company has had a creative approach to financing. Musk has personally contributed millions of dollars to the company, and has helped get it out of sticky situations in other ways. In 2008, for example, Musk put together a $40 million debt deal that closed on Christmas Eve, just hours before the company would have run out of money.

 

[elitenapper]

No ...... I prefer long positions only. No selling of options at all, no credit or debit spreads.

What do you consider to be the drawbacks of vertical spreads compared to single long call or long put positions?

It would seem that for small expected moves, a vertical spread would help reduce the cost of a position.

 

[elitenapper]

They are burning through $6500 every minute!!!

Yet people are still paying hundreds of dollars for one share of the company!!!
...

.

There are now reports that Elon Musk's petulance during conference call has been responsible for the sudden deep slide in AH trading. If cult mentality has been the reason for TSLA's high valuation, then Musk has probably done the greatest disservice to Tesla and its shareholders. I'm beginning to see why there has been a stream of resignations at Tesla's upper management.

 

[OptionsOptionsOptions]

What do you consider to be the drawbacks of vertical spreads compared to single long call or long put positions?

It would seem that for small expected moves, a vertical spread would help reduce the cost of a position.

You answered your question in your previous post.

....... Suppose you buy a TSLA May 18 $300 Put and sell a May 18 $280 Put today, and TSLA goes to $280 at some point tomorrow, and looking to go lower .......

The short 280 put capped your gain.

 

[elitenapper]

I like your handle. if you are elitenapper, then I am superEliteNapper.... to answer your question, it depends on your future outlook of the stock. If you think it will continue to go lower, you could sell a lower vertical around the area you think it might stop and reverse (maybe some support level), then you'd end up w a condor, or sell a back month vertical to lock in a vertical calendar swap. so many ways to lock in a profit . There is always of course the option of simply booking the profit and... well.. take a nap. As far as verical going south on you due to upmove .. same thing, taking a loss is usually the best option.

Thanks for the reply.

My naps are sometimes as long as, if not longer than, my sleep, and often more invigorating. I've got a sleep disorder.

 

[schweiz]

They are burning through $6500 every minute!!!

Yet people are still paying hundreds of dollars for one share of the company!!!

I read a few articles about Tesla Q and it is funny to see that in general US articles mention the higher production and the orders (only positive things) while non US articles speak about the losses (biggest loss ever for Tesla in Q1). For US articles these losses seems to be irrelevant...

Objective press releases are apparently hard to find.

It will be a race against time: fast increase of X model deliveries or fast burning cash.
The outcome of this race might decide about the future of Tesla.

If they survive the next problem will be the loss of their "monopoly" on full electric cars as many big car facturers will be starting up competitive models soon. And they have probably a better organized production facility.
https://www.bloomberg.com/news/arti...ctric-cars-are-coming-for-elon-musk-and-tesla


https://www.bloomberg.com/news/articles/2018-05-03/elon-musk-s-most-dumbfounding-moments-on-tesla-s-earnings-call?utm_medium=social&utm_source=twitter&utm_campaign=socialflow-organic&utm_content=markets&cmpid==socialflow-twitter-markets

 

[Pekelo]

Thread title is somehow off. TSLA is DOWN -6% before the open.

 

[mushinseeker]

downside of single vs vertical? - vega