TSLA - (Short Premium) Call premium is rich right now

Updated

There is call skew in TSLA right now which makes call selling more profitable than put selling. I am going to take advantage of the high IV and the call skew by selling premium on the call side. In addition there are 2 long tailed bearish candles, one of them being a bearish pinbar, which could signal weakness in the short term. Keep in mind these bearish candles come off of a very large bullish candlestick so I don't expect this to be a reversal, but I do believe we could see a small pullback to the 320 area. If that occurs we may also sell naked puts at that point to turn the trade into a strangle.

Trade active

Short put @ 190 for $6.00 credit, 16 delta, 45DTE

Trade closed manually

This trade was the victim of very unlucky timing. Closed the trade for loss that is 1x my credit. Credit was $6 and my loss was around $6.5. I would normally stay in a trade for the long run and get my money back by continuing to sell premium, but the problem is that TSLA has now become binary game. That means this will either shoot way above 400 or drop to 300 or lower based on this buyout. I don't play the binary game, so I take the loss on this one and move on.

Note

Sold naked 200 strike put into close today for $2.40 credit. Huge up move after hours so. This will reduce my loss down to $4.00. I plan in continuing to sell premium here until I get into profit.

Trade active

Sold naked 200 strike put into close today for $2.40 credit

Trade closed manually

Had rolled up my put to the 250 strike last Friday and then cashed out this morning for a $.50 profit, so loss has been reduced to a solid $6. I think there is real risk for price to drop back to it's post earnings price, so I am going to wait and if price does drop I will considering selling puts in here again for a juicier premium.

krugman87

Dad of 5 • Dev • Candlestick Whisperer • Crypto class of 2019

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