TSLA from Henry Schwartz at TradeAlert

Henry Schwartz
Options Trading Strategies


This is an interesting trade, seems more like a short put spread than a long call spread. A contact suggested it could be a big winner from the GME debacle rolling into something more legit!


TradeAlert
Tesla!! $116 million call spread bought in Tesla with 50/50 risk reward. Shares up nearly 1% today near $858 with a massive trade printing on the Amex where a customer paid $25.85 for 45k April 800/850 call spreads, opening on both legs. This trade creates a position that could return more than $108M in profits if Tesla shares are still above $850 in 70 days when these contracts expire. [TSLA 859.98 +10.00 Ref, IV=57.0% -1.1]

 

How much could the position lose? Why does nobody ever talk about risk?

 

In my experience, it is very hard to tell what the initiating customer is doing. He could be betting an up move or protecting a short position in the stock.

 

It was literally in the first sentence. 116 MM bet with 50/50 risk/reward

 

So it is an in the money debit spread as they bought the 800 calls and sold the 850 strike?

 

Long call spread=short put spread,assuming same month and strikes...Box arbitrage