Stock / Symbol: Tesla Motors / TSLA
Option Strategy: [private_monthly]double calendar[/private_monthly]
Price at trade post: $225.75
Reasoning: For TSLA's earnings announcement on Thursday, the street is expecting a move of +/- 17. To play this, I'm putting on a [private_monthly]double calendar[/private_monthly] with strikes about 20 points OTM. The Greeks currently show a delta of 0.63, a positive theta of 62 and a vega of 9.6. If TSLA trades either [private_monthly]up to $245 or down to $205 on Friday[/private_monthly], following the earnings , we'll have a nice profit on our hands. If not, we'll just close out the trade for a relatively small loss. Please note that we're using weekly options here.
Trade Details:[private_monthly]
BTO 1 TSLA AugWk2 245 call
STO -1 TSLA AugWk1 245 call
BTO 1 TSLA AugWk2 205 put
STO -1 TSLA AugWk1 205 put
for a max net debit of $2.50 per contract (day order, limit order). The current mid is 2.20. Try for the mid +0.10. If not filled today, ok to try again tomorrow.
Requirements:
Cost/Proceeds $250
Total Requirements $250
Estimated Commission $6
[/private_monthly]
Max Risk: $250
Max Reward: $500 or 100% (at current volatility level) at either[private_monthly] $205 or $245 [/private_monthly]by Aug 1
Profit Range: [private_monthly]$200 to $210 & $240 to $250 by Aug 1[private_monthly]
Suggested Downside stop: NA
Suggested Upside stop: NA
Non-members, click here for access
