Tesla Inc. (TSLA)
TSLA publishes earnings on Wednesday after the closing bell.
I shall use the APR series of options, which trades for the last time 58 days hence, on April 21.
Implied volatility stands at 46%, which is 3.9 times the VIX, a measure of the volatility of the S&P 500 index.
TSLA’s IV stands in the 41st percentile of its annual range and at the peak of its most recent broad movement.
The price used for analysis was $275.60.
|Premium:||$29.28||Expire OTM||iron fly|
The premium is 56% of the width of the position’s wings.
The risk/reward ratio is 0.9:1.
Decision for My Account
I like the trade, but I’m passing on it. The high price of TSLA stock would force me to commit a higher share of my trading funds than I am comfortable doing, even for a single contract. Hey, Elon Musk! Time for a stock split.
By Tim Bovee, Portland, Oregon, Feb. 22, 2017