Tesla Must Be A Good Options Play On Both Downside And Upside?

Discussion in 'General Trading Discussion' started by Chartman, Apr 3, 2018.

  1. Chartman

    Chartman Senior Investor

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    It may seem like a bizarre statement but Tesla must surely be a good options play on the upside and the downside. Personally I think the share price will either recover on the back of better than expected Model 3 delivery numbers (and a fund raising) or fall a lot further if concerns about debts and Model 3 numbers are as bad as expected. I expect a massive move either way in the short to medium term.
     
  2. JR Ewing

    JR Ewing Super Moderator Staff Member

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    Such volatile stocks certainly do tend to lend themselves to options on either or both (straddle) sides.

    I have had luck in years past buying TSLA puts ahead of earnings. I'm thinking it might be a good time to buy more puts.

    But in the last year or so this stock seems to be like the "Jason Voorhees" of all stocks - it seems to just keep on and on no matter what bad news hits it, and it seems to fight its way back up when it does get knocked down. I'm shocked that it finally fell so low in the last month, and not at all shocked that it moved up somewhat on bad earnings news.

    Of course we can always count on Musk making big promises to go along with the promises from last quarter that didn't pan out. Seems to be a recurring theme that keeps his worshipers and the other assorted greenie dreamers hanging in there and buying more. Obviously there are some deep pockets among his admirers who are willing to throw big money his way.

    I have used options straddles (often successfully) on many volatile stocks over the years.
     
  3. longtermbull

    longtermbull Administrator Staff Member

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    I think a straddle would work perfectly on this occassion - it would probably be relatively expensive as everyone will be think the same but these shares are in for a serious roller coaster ride!
     
  4. gowiththeflow

    gowiththeflow Senior Investor

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    I think the suggestion that Tesla will either go bust or fly high again in the short to medium term are probably spot on. This is THE critical time in the history of the company.
     
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