Looking at the Day chart, Tesla is as dangerous as it can get when doing options!!! [I prefer to look at risk before i look at reward, the downside is what hurts the most] On February 4th... on Friday, 1/29 tesla reported and given the outcome it ran from 578 to 659 in AH trading it opened 1/30 around 632 was pretty flat and closed around 641 before 10am on 1/31 it ranged 638 to 646.. this is NOT a company you do a credit spread on.. maybe doing a debit spread, given that the loss is limited to your cost at entry but lets say you decide to do a credit spread... Feb 7 strike 645 were selling for 21.40 * 100 = 2140 per call.. so lets imagine (as i can do this on TD using OnDemand) you sell the 645 call, and buy a 660.. and you get a credit for 7.37 x 100 = 737.00 taking the other side of the trade potential... you sell the 642.5 put for 19.40 and buy the 627.5 put for 13.30 this would give you a credit of $6.60 * 100 or 660.00 fast forward to morning of feb 4 and lets see what you got.. your put vertical is selling for .05 cents... your call vertical on the other hand.. is 13.78 ie... you need to pay 1378 to get out of the deal and take a loss However if you bought the call for 1400, taking a chance, you would be sitting on 25,000 sale similarly if you sold the naked call, you would be about 26,000 in the hole.. the stock price was ranging up to 900!!!!! today it would be 200 down to about 745 The ONLY lower risk way to play TSLA would be to day trade calls or puts you buy not credit and certainly NOT naked credit that wasnt in some protective spread.. in that case... you could risk the full call price... maybe 2500 for 1 and sold if it ranged up high enough and before it ranged down.. and if it just didnt go your way in the day, you would only be out 2500 so trading tesla on options would not be for the person who didnt have big brass balls or a person who was foolish enough not to know what the actual outcome could be especially if its a credit deal vs a debit deal.. if i didnt state the above very well, forgive me.. i am not used to discussing these things as i am looking at the numbers IF you have some indication of Tesla ranging up... a single option could do you very well especially if you buy it to limit your loss to the cost of the trade only... but beware the speculator who decides to do a credit... they will either clip their own wings to some small amount or if not a spread, blow their account in one day (and maybe more)
sorry.... It was just thinking out loud.. how would one trade it and control the risk if it can do 100 points in a day? where would you put your limit... how would you set a stop? How fast could it move before you could hit sell if you didn't have a stop? to my sense of trading its hyper risky..
I bought puts expiring the end of the day today hoping Tesla smashed. It traded down a few dollars and got out the tiny profit. I'll take another shot at it next week.