Here’s the daily chart for TSLA for this summer. I’ve been feeling rather bearish on most of the big caps in the S&P/Nas, but I’m not totally sure. In this chart, I see what appears to be a TSLA head and shoulders top, with classic volume setup (high volume into the first shoulder, then decreasing volume. On the other hand, perhaps this is just a reduced volume consolidation for a continuation of the uptrend. I just feel like something is going to happen (up or down) soon.
I entered a strangle on TSLA yesterday. Aug 25 expiration, 320 Call and 210 Put. The whole thing (Call + Put) was less than $1. Given the negative action yesterday, I’m sitting better going down, but I can still go either way. I just need for them to break out of the late July range.
To be honest… all chart patterns are just bs. They feed the hindsights of “trading influencers” and nothing more. For trader like myself, nothing beats good-old tech indicators to trade the volatility.
I got out of the Put side of this trade for a 120% profit on that side. If the Call side expires worthless then I will have made 10% profit, but I do not think it will expire worthless. I got out for 2 reasons. 1) I have an assured profit on this trade, and I am now trading the call side on the house’s money so I can make extra profit for zero risk, and 2) I have a feeling that the overall market is looking to make an upside move in the short term even though my long term viewpoint is bearish. Often, the bear market rallies are powerful. The increased volatility makes bear markets more profitable for short-term traders.
You really think Tesla will hit and exceed 320 by Aug 25, 2023???
I think there is a 99.887% chance that it will expire worthless.
Today it is worth $0.20, if the stock remains here, next week it’ll be worth $0.15 or so, the week after $0.10 or so. If the stock shoots up by 10, with a delta of 0.02, it’ll probably go up to $0.40 or so. If we see a HUGE increase, like $30, then delta will rise, and it’ll shoot up perhaps even to $1 or more.
I think you meant to say that “you won’t let it expire worthless” and will sell it at some price between now and then.
This is one of the reasons I prefer selling (writing) out of the money options instead of buying them. Because they usually expire worthless, I usually have only one decision to make, when to buy and at what price. I don’t have to decide when to sell because the position in most cases is self liquidating.
We had this discussion in another thread. I never hope that the stock price reaches my strike. I am always out way before. Option prices change vastly without the stock prices needing to even come close to the strike price. This is why I can make 100% or better profits (no not always, but yes lately). So yes, I made over 100% profit on my TSLA Puts, and if my Calls expire worthless on 8/25 then I will still make a profit. In calculating my profit I have already subtracted the cost on my calls. This means that anything that I get from the calls is extra profit, certainly if we rally next week to where I would have profited, but even if it is only worth a couple dimes which is technically a loss on the calls alone but because I already considered the cost of those calls, in my profit to date, it is all extra. I guarantee that I will not be holding the calls until they are worthless.
Yes, the options contract will be expiring worthless, but on who? At .20 (or any current price) someone will definitely buy it. Not because they think it will hit 320, but because they think that they might be able to sell it for 0.24 or a 20% gain in a few days.
Yes Mark, I see what you are saying. What I meant to say is that I do not think they will expire worthless ON ME.