Made a Tesla Trade at the Close

Back on 2/2/21 I bought 100 shares of Tesla at $857. At that time I sold a 1 contract Call taking in a $2000 premium. When that Call expired Tesla went into a nosedive and has been lower ever since.

With the stock lower I sold another Call on 3/22 taking in a $4200 premium. I had to go out to 6/18/21 with my Expiration Date to get this premium. Today is 4/30 and Time Decay ate away at the premium and today it’s at $10.90.

The stock is well below my buy-in price but the stock came out with great earnings. With still 50 days to go for this 6/18/21 Call to expire and the premium down, I decided to do a Buy to Close to close out the position. I bought my way out for $10.90 for a total of $1090. I sold the Call for $4200 and just bought my way out for $1090 for a profit of $3110.

 

3/22/21 – Sell to Open 1 TSLA 6/18/21 $860.00 C @ $42.00 (+$4200)

4/30/21 – Buy to Close 1 TSLA 6/18/21 $860.00C @ $10.90 (-$1090) 

Profit +$3110

 

I was in this position for 5 weeks and there’s 50 days until expiration. Some might say, why didn’t I just hold the position for another 50 days to keep the entire $4200?

With the great earnings, I felt it was worth locking in the $3110 now and not holding another 50 day for the extra $1090. I feel Tesla has a chance to move higher in the next week or 2 (it’s up $32 today) and I will get another Call sold at this time instead of waiting 50 days to get another Call sold.

I know a few of you are waiting for a return email with your questions. But if you don’t understand my move here please send an email. I’ve been very busy but I’ll be getting to all my emails in the next day.

 

Successful trading,

Steve

The Options Coach