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TSLA: Earnings and more dilution

Another TSLA earnings just rolled in. While press release did not mention any capital raise, Elon on the call said:

Speaking on a conference call after Tesla announced its fourth-quarter results on Wednesday Musk said the company does not yet need to raise capital to finish its Model 3 production ramp, but that not doing so would bring the company "close to the edge," which he said was "probably not the best thing for shareholders."

Widely expected, though sentiment is running high as they keep promising Model 3 this year. So the dilution might just be swallowed by giddy investors.

I have traded TSLA earnings and other Tesla events before. In fact, Tesla has been somewhat of a battleground stock for me. I think on balance I lost more money than made. It is fun to think back to 2012 and recall selling 38 strike puts, "38"! on TSLA.

This time I had a real trouble generating a directional idea going into earnings. So I did what I almost never do. I went with a neutral position sort of strangle swap or double diagonal. I am short a strangle in Feb24 nearest expiration options. Simultaneously I am long a slightly wider strangle in Mar16 regular monthly expiration. This was open for a small debit of $2.06.

As I write this in the after hours the stock is up ~ 1.5%, which works for me. But, it all depends on what analysts will do tonight. If they eat the fodder from Elon's hand and upgrade the stock we may see a gap up tomorrow. Alternatively, if they downgrade en masse we may see a gap down.

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Number of options contract

Good point OPRAnut. Thank you

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Discussions on option strategies designed to produce income. Covered calls, selling puts and more advanced options income strategies. Learn options trading with a community of fellow traders.
Selling puts on Sketchers

SKX is up +20% today. Closed my short puts position for $0.01. Arguably I could have waited a week to let them expire and avoid commission costs. I usually prefer to pay a few cents to close a position as early as possible. It helps to avoid sharp reversals that occasionally happen. Being short naked options - every day you can avoid carrying that position is a plus.

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Juicy Short Puts Opportunities post Elections

Closed my credit spread @ $0.05 realizing close to max profit. Surprised by how easy it was filled considering puts were far OTM. My guess is the other side wanted out.

RGR credit spread

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Portfolio protection is crucial to building wealth in the Market. And options are the best method to protect your investments. Learn how to use options to fortify your nest egg against Market downturns, Black Swan events. Defensive options strategies designed to hedge risk.
What is the best hedging strategy to play an Earnings Report

@jonescd Search this forum for the word "earnings". Actually we should have a tag for that... Good idea. Perhaps we should put together a thread that collects the most useful earnings trades anyone?

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Option Trading Strategy Results: 30-Dec-16 Weekly Expiration

It was generally a good week for volatility sellers in the options market for the weekly expiration of 30-Dec-2016. This was especially true for calls; winners were far more prevalent for puts and at-the-money bets, but losers outpaced winners across the board.

As could be expected during a holiday period, the market lacked major catalysts during the week. Profit taking led the major averages to close out 2016 with a three-day losing streak, drifting off their recent highs.

For the week, the Dow dropped -0.9%. Meanwhile, the Nasdaq slipped -1.5% and the S&P 500 tumbled -1.1%.

This was the whimper that ended a bang of a year though. The year as a whole saw the Dow jump +13.4%, the Nasdaq climb +7.5% and the S&P 500 advance +9.5%.

For the final week of the year, unhedged ATM bets returned winners 41.9% of the time, leading to an average loss of 6.6%. The call side is where the real blood-bath occurred. Only 4.6% of unhedged 25-Delta Call positions came back winners and the average loss was 79.6%.

Winners were more prevalent for 25-Delta Put bets. Unhedged positions here were winners 33.9% of the time during the week - still generally a loser 2 out of every 3 times - but the average return was positive at +23.9%.
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Standouts

VanEck Vectors Junior Gold Miners ETF (GDXJ) -- Gold mining stocks were big winners on the week. Gold prices suffered a decline in the wake of Donald Trump's election as president, but bounced back during the final week of the year. This rise boosted gold miners, especially during a rally on Thursday.

As such, the GDXJ, a gold-mining ETF, was one of the standout performers on the call side during the week. Unhedged 25-Delta Calls for GDXJ had an average return of +700%. Unhedged ATM Straddles returned an average of +126.1%.

iShares Nasdaq Biotechnology (IBB) -- Sticking to the ETF theme, biotech stocks did particularly poorly during the week. This was evidenced by a steady decline in the IBB, a biotech sector ETF, which started the holiday-shortened week with an initial advance but then lost ground steadily through the rest of the week. 25-Delta Puts for IBB had an average return of +589.8%, while ATM Straddles returned +108.7%.

Hedging Comparison

It was a mixed bag for hedging during the week. Generally, it was best not to hedge, except on the call side.

Once-hedged positions were the saving grace for the 25-Delta Call bets, turning a significant loser during the week into a winner. However, the effect was the opposite on the put side, turning a winning position, on average, into a losing one.

Once-hedged 25-Delta Calls had an average return of +18.4%, compared to a loss of -79.6% when unhedged. Daily hedges weren't as helpful, but did work to cut the losses, with an average loss of -17.2%.

Once-hedged 25-Delta Put positions had a negative return of -64.3%, compared to a positive +23.9% when un-hedged. This just got worse when hedged daily. The average loss for a daily hedged 25-Delta Put was -94.2%.

For ATM Straddles, once hedging had little impact, turning an average loss of -6.6% when un-hedged into an average loss of -6.1% with single hedging. On average, daily hedging was a mistake, however. The average loss expanded to -24.8% with this strategy.

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Some traders believe that volatility is the most important factor in option pricing. Discuss all things volatility here. Agree, disagree, debate and learn options valuation, volatility and pricing.
Put/Call ratio scrapping bottom

It is a nice chart @baerrus. I did not know Put/call ratio even has a ticker symbol!

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Dollar - An election trade?

@bigtimedime I agree that UUP is not an ideal trading vehicle. I would love to see a straight European style options on DXY index.

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Reviews and questions on option tools, software and options brokers.
Trading simple get profit plus Rebate

To get the desired output from trading it's necessary to take the risk and analysis the latest trend or strategy of trading.

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Discussions on trading in commodities options, index options and options on futures. Discover new opportunities for profits.
Commodity Tips and Trends

Oil is poised to be this year's top investment asset, notching a nearly 50% gain during 2016, analysts said.The price of crude oil climbed back from a low of $27 a barrel to just south of $58 following several years of poor performance.The price of crude oil today settled at $52.65. The price of Brent oil futures were also up, settling at $54.85.At mid-day today, the price of West Texas Intermediate Crude, the American standard, was $52.97, up 48 cents per barrel, or 0.98%.Brent oil was up too, at $55.02 per barrel, an increase of 56 cents per barrel, or 1.07%. -- Sani Nair( epic research )

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Flash crash in Gold

Dec 22 Gold edged higher in Asian trade on
Thursday, after ending the prior session nearly flat, as the
U.S. dollar retreated from 14-year highs touched earlier this
week.

FUNDAMENTALS * Spot gold was up 0.1 percent at $1,132.04 an ounce

by 0049 GMT. Bullion closed nearly flat in the previous session.
* U.S. gold futures were little changed at $1,133.60
per ounce.
* The dollar index, which measures the greenback
against a basket of currencies, slipped 0.1 percent to 102.960.
It reached 103.65 on Tuesday, which was its highest since
December 2002.
-- MCX Tips Provider

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FOMC 2017 Meeting Schedule

Happy trading to everyone

The FOMC holds eight regularly scheduled meetings during the year and other meetings as needed. Links to policy statements and minutes are in the calendars below. The minutes of regularly scheduled meetings are released three weeks after the date of the policy decision. Committee membership changes at the first regularly scheduled meeting of the year.

FOMC 2017 Meeting Schedule

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2016 and 2017 Schedule Calendar, Stock Market Holidays

@OPRAnut Thanks for posting! I know e can rely on you to keep us updated on all regulatory stuff. Happy holidays to you !

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Tired or in the mood for a lighter fare? Anything and (almost) everything can be discussed here except Stock options and Mr. Market
More From Backstage WallStreet - Mutual Funds

Still Institutional investors are better informed then crowd. Recent example is the last job report - institutional were buying one day before the job report while the crowd was selling http://www.spreadvectors.com:

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Reading Backstage Wall Street

By Josh Brown and enjoying it very much. Posting some pearls here:

When you realize that you are riding a dead horse,
the best strategy is to dismount.
—Sioux Indian proverb

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