TSLA Analysis

Tesla Inc. (TSLA)

TSLA publishes earnings on Wednesday after the closing bell.

I shall use the series of weekly options that trade for the last time nine days hence, on May 12.

Implied volatility stands at 41%, which is 3.8 times the VIX, a measure of the volatility of the S&P 500 index.

TSLA’s IV stands in the 40th percentile of its annual range and the 79th percentile of its most recent broad movement.

The price used for analysis was $312.13.

Premium: $18.20 Expire OTM  
TSLA-iron fly Strike Odds Delta
Long 277.50 90.0% 9
Break-even 330.70
Short 312.50 53.8% 49
Short 312.50 45.9% 51
Break-even 365.70
Long 347.50 91.9% 9

The premium is 52% of the width of the position’s wings.

The risk/reward ratio is 0.9:1.

Decision for My Account

TSLA is eminently tradable, but I am passing on it because of the high price. It puts more risk in a single position than my guidelines allow. Hey, Elon Musk! Time for a stock split?

By Tim Bovee, Portland, Oregon, May 3, 2017

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