TSLA Earnings
TSLA stock is strongly bullish
Tesla is slated to announce earnings after market close tomorrow (Wednesday Oct 20). The stock performance has been strongly bullish over the last 3 months. It is up +15% over 1 month and up +35% over 3 months.
The Options AI website is projecting a move of ~4.0% up or down post earnings. That would place the stock price between $840 and $910 at the end of the week.
The previous earnings have only had a ~2.6% move with the last 4 quarter moves as follows:
Oct 21 - 22, 2020: +0.75%
Jan 27 - 28, 2021: -3.32%
Apr 26 - 27, 2021: -4.53%
Jul 26 - 27, 2021: -1.95%
Interestingly the last 3 quarters the stock price has actually fallen after earnings announcement. Given that the stock price has climbed +35% over the last 3 months there is a good chance that it falls after the release again.
The question is by how much. I will be risk averse and stay at least ~10% out of the money. I will also use the options that expire this week (Friday) so just playing the earnings event.
The price trending being bullish I like to stay with the trend. So, I will first sell a put spread that is at least 10% out of the money. Then, if premiums make sense, I will sell call spread to make it an iron condor. For the call spread I will try and be even more risk averse and go ~15% out of the money.