Iron Condor on TSLA

Discussion in 'Options' started by Pekelo, Jun 12, 2017.

  1. Pekelo

    Pekelo

    Let's run a test on my strategy outlined here:

    https://www.elitetrader.com/et/threads/in-search-of-the-3rd-chord-i-mean-leg.310110/

    In short selling IC 3 months out and if one side is tested selling a vertical close to the original price to make it a 3rd leg.

    TSLA is at $355.8

    Selling IC Sept 15 300/310/400/410 for 4.97 the max. loss is 5.05 so it is risk 1 to make 1...

    If in the next 2 months price approaches let's say 400, I would sell a 340/350 put vertical. I know the original IC isn't symmetric but I am more bullish on TSLA until the M3 comes out then bearish, specially after this 20 some bucks pullback...
     
    ffs1001 likes this.
  2. Pekelo

    Pekelo

    This position is currently $3.7 so up about 25% after 6 weeks... Stock is at $340.
     
  3. Pekelo

    Pekelo

    The position is at $2.45 up 50%. Stock is at $345.
     
    beerntrading likes this.
  4. I wondered how this strategy would pan out for you...it looked like a good one then. Looking really good now. Nice one!
     
  5. Pekelo

    Pekelo

    One month to go and the position is at $1.4 so up 70% or so. Stock is at $356.50... Just for the record, the stock has been in the 302-388 range, but faithfully always returning to my middle point.

    TT eat your heart out!!! :)
     
    Last edited: Aug 17, 2017
  6. Pekelo

    Pekelo

    Unless TSLA rallies 25 bucks in the next few hours, this position is expiring worthless, gaining the whole 100% on the BP. Currently $375.5

    Let's do another one! Selling the Dec IC 320/330/420/430 for $4.75

    This time we will probably cover or adjust just before the Oct 24th non-Earnings date, but still should make a 20% in the next 5 weeks... If the price moves 40+ bucks in this time frame a 3rd leg will be sold to counter act the movement...
     
    beerntrading and ironchef like this.
  7. Here's a simple back test of your strategy. You come closest to selling the 40 delta and buying the 20 delta ones. So as you can see its a winner about one out of two times. I varied the parameters to manage risk and for example bail if you lose more than 100% of the net credit but that cuts out too many winners. Cutting out earnings trades eliminates too many trades and is a loser.

    tesla.jpg
     
  8. Pekelo

    Pekelo

    Well, automatically selling the condors probably wouldn't work, I also backtested it using this year. The stock was just too bullish. But currently the company reached a point were the good news are not coming/far away in the future, but the bad news also aren't here yet. So that means the stock price will be range bound as it was in the last 3 months. I do expect bigger (negative) movement after the earnings, but that is still 5 weeks away.

    Although institutions started to give up on Tesla, reading reviews on SA there are still just too many fanboys happy to buy shares when it takes a dip.

    Bottom line is, there is also fundamental evaluation behind writing the IC, not just blind strategy...
     
  9. vanzandt

    vanzandt

    Fundamentals or not... TSLA's chart sure looks like its getting ready to explode up.
    Assuming no geo-political BS...It could nip at $400 pretty soon. It is what it is, be cautious on the bear side imo.
     
  10. lylec305

    lylec305

    TSLA close 350.74 Friday, September 22 2017. Drop 15.78% in 1 day. It may implode or blow itself up, if that's what you mean...
     
    #10     Sep 24, 2017