TeslaDiupdate TSLA Pre Earnings Spread - Short 1/31 400 and Long 2/7 400
TSLA is in a symmetrical butterfly or Iron Butterfly configuration and is awaiting earnings tomorrow evening.
It is sitting at institutional support at the bottom of its long term ascending channel flashing a double bottom.
The 400 strike is dominant in terms of TSLA open interest with approximately equal open contracts for both puts and calls going out 90 days and the implied volatility of the 1/31 expiry is massive.
I deployed calendar put spreads earlier this afternoon that I plan to close tomorrow afternoon.
1/31 400 puts were trading for around $22.00 per contract this afternoon and are massively decaying. This position should be profitable by the open and its breakeven levels are 360 to the downside and 450 to the upside.
I assess the probability of a significant move in TSLA before earnings to be minimal and so I'm looking to scalp some IV inflated rapid theta decay for a quick win. I mistakenly believed that TSLA's earnings were the 30th rather than the 29th and so I'm going to get less time on this trade than I would have liked, but, them's the breaks.
See associated spread:
optionstrat.com/NSHFnyrMWH0Q
It is sitting at institutional support at the bottom of its long term ascending channel flashing a double bottom.
The 400 strike is dominant in terms of TSLA open interest with approximately equal open contracts for both puts and calls going out 90 days and the implied volatility of the 1/31 expiry is massive.
I deployed calendar put spreads earlier this afternoon that I plan to close tomorrow afternoon.
1/31 400 puts were trading for around $22.00 per contract this afternoon and are massively decaying. This position should be profitable by the open and its breakeven levels are 360 to the downside and 450 to the upside.
I assess the probability of a significant move in TSLA before earnings to be minimal and so I'm looking to scalp some IV inflated rapid theta decay for a quick win. I mistakenly believed that TSLA's earnings were the 30th rather than the 29th and so I'm going to get less time on this trade than I would have liked, but, them's the breaks.
See associated spread:
optionstrat.com/NSHFnyrMWH0Q
Catatan
So far this is not going as planned. It seems I underestimated the ability of IV dynamics to offset the theta decay, it's hovering around breakeven so far. I'm thinking that I just didn't have enough time on this trade unfortunately, but we'll see, I planned to hold until later this afternoon.Trade aktif
Trade is active, I entered yesterday.Trading ditutup: target tercapai
Catatan
Bah, the TV UI here is a little rough. I did close the trade at breakeven. The IV dynamics fully offset the theta decay which is interesting.
Liquidity was very much an issue, I had to just in the middle of the spread for a long time to get this filled either way.
No loss, no foul, lessons learned.
Catatan
So interestingly, this spread would have been quite profitable today, I'm thinking that the weekly OPEX dynamic may be directly impacting TSLA's price movements because of the strength of the 400 strike. Next time I might actually use this type of spread to trade through an earnings event.
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