TESLA Earnings Gave me an opportunity to exit my trade

in LeoFinance10 months ago

Well, a few days ago I posted about the long-term options play I was in on Tesla (TSLA) and how the stock ran so far so fast that I was at the point of giving back profits each day the stock went up.

My trade has basically flipped where I was rooting for the stock to go down so that I could regain some of my profits.

There earnings announcement gave me that gift as the stock sold off hard yesterday to the tune of 29 points.

My short leg option expires today and rather than roll it out to see if TSLA goes down more over the next week (and honestly a relief rebound is very possible) I decided to snag the little bit I got back and close out the trade.

It was still a nice profit, but I gave back half of the gains over the past month or so.

The trade I had on is what is called a poor man's covered call. You buy a LEAP option long and sell a short term call against is for income.

In the end, I bought to close the 7/21 185s and sold to close the Jan 2024 175s for a net credit of 19.51. I was into the trade for 11.31 as my cost basis got lower each time I rolled out the short-term option.

Still a very nice profit, but it does not always feel like it when you are up twice that at one point.

I had this position working since April. So when you look at the chart you can see how it ran away from me with the stock basically mooning once it cracked that 200 area resistance.

Posted Using LeoFinance Alpha


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