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 |
| Calls | |||
| Long | 277.50 | 90.0% | 9 |
| Break-even | 330.70 | ||
| Short | 312.50 | 53.8% | 49 |
| Puts | |||
| 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
Tim Bovee, Private Trader 
[…] analyzed TSLA but rejected the […]
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