TSLA option question

[joesxm3]

I know you guys like to trade short duration options, but I was looking at the premiums for selling a March 2023 or January 2024 put on TSLA and they struck me as unusually juicy.

With earnings coming out today would that spike up the premiums?

I don't remember the exact numbers, but the Jan 2024 put at $750 had a premium of something like $285. I calculated the percentage and it was 30% of the money to back the contract.

The March 2023 $650 put had a premium something like $98 and calculated out at something like 14%.

I almost pulled the trigger, since I would be happy to buy TSLA for $650 or even $750 with the expectation of holding it for five or so years, but I decided that I was acting on impulse and thinking about this with 15 minutes left before market close on earnings day, so I just observed as a learning experience.

 

[thefist]

Unless you just want to speculate, your decisions when using options should be based upon some fair value estimate of the stock. This is especially true when looking at LEAPS like you are doing.
But trading the day before earnings… just say no.

 

[clifp]

Unless you just want to speculate, your decisions when using options should be based upon some fair value estimate of the stock. This is especially true when looking at LEAPS like you are doing.
But trading the day before earnings… just say no.

Yup, selling LEAPs is certainly an interesting idea, and TESLA is finally looking interesting at these levels.

However, the day before the earnings is the antithesis of making a two-year-long bet on a company.

So what did you learn?

 

[joesxm3]

I learned that most traders do not know how to evaluate the $300M one time charge to pay social security tax on Elon's stock options?

 

[matjung]

Within a year or two you may get them for the price you are looking for.
It's a momentum stock.

The premium over other CARs and EVs may not last forever.

With each rate hike the price for Tesla could dip further than most analysts expect.

 

[aja8888]

Trying to evaluate Tesla's stock price at any given time is a WAG (wild assed guess)!

 

[Fermion]

Very risky IMO. There are things that could cause Tesla price to collapse to just $100B valuation (which would still put it above Ford), meaning your $750 put could go far into the money.

I feel like nobody even remembers stocks like Nokia or Kodak anymore....was it that long ago? They were both market leaders in their heyday.