Another Big Surge: What Opportunities Are Still Ahead?
First, let's state the conclusion:
Tesla's performance clearly caught both bulls and bears off guard. What's better than expected is that Musk indeed revealed a reduction, which is consistent with the overall viewpoint in the article I wrote last week. $Tesla (TSLA.US)$
If President Trump wishes, he would still spend 'one or two days' a week handling government affairs, but he will allocate more time to Tesla
After all, Tesla is currently facing too many negative news items, but sometimes things can reverse when they reach an extreme![]()
As a shareholder, I think this is a good situation! It would be even better if there was more information about Model Q!
Let's talk about a small attempt at options trading strategy before Tesla's earnings release:
On April 21, I simultaneously bought Tesla $230 calls and puts.
Purpose: To go long on volatility![]()
At that time, Tesla's $230 options had an IV (Implied Volatility) of about 120%, with a VEGA value of around 0.1.
The expectation was for IV to rise to about 160%.
So I would profit 0.1 X (160-120) X 100 = 400.
Of course, due to the time decay of options, the THETA of this combination is -200 (for 2 days), and the time value will increase over time.
At the time, I did a rough calculation and felt that I wouldn't lose much money at least, so I opened the position.
Last night at the market open, it was still at a loss, but later it slowly started to move up. There are still things that need to be tested with this strategy:
1. Open the position at the market open on the day of the earnings announcement, avoiding the time value decay that comes with overnight holding.
2. Consider using a Strangle instead of a Straddle approach, which seems to potentially enhance returns.
3. I also noticed that for this earnings period, the IV of options with lower strike prices was significantly higher, which needs to be noted.
I plan to use this method for high-volatility, high-IV companies that are about to announce earnings in the coming days, such as $Strategy (MSTR.US)$ $Robinhood (HOOD.US)$ $NVIDIA (NVDA.US)$ . I think this is very interesting and worth paying close attention to.
You may want to pay special attention to the specific earnings dates. I'd like to praise Moomoo's earnings calendar feature here, it's truly excellent:
Robinhood: April 30
MSTR: May 1
NVDA: May 28
Last night, I didn't dare to trade Tesla options overnight, haha! A 5% increase would definitely result in a double kill. Although I had considered selling both call and put options on Tesla at +/- 20%, I ultimately decided not to trade due to risk assessment.
Besides the calendar feature, the option unusual activity function is also an excellent feature. It's very interesting to see big money betting on options. I noticed there were huge funds buying $SPDR Gold ETF (GLD.US)$ calls, with extremely large transaction volumes, adding up to over 100 million dollars.
You can also see the profit and loss situation of these large order movements, which can serve as a reference!
The market has recovered a bit recently, which I think is quite good! Haha!
Actually, there have been quite a few opportunities in individual stocks lately, especially in Hong Kong stocks and Chinese concept stocks. The $PDD Holdings (PDD.US)$ we talked about last week has already gained 10 percent.
MSTR has also risen quite a bit, and BTC has been surging recently as well!!!
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
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kat kukuuu : I’ve been eyeing MSTR’s earnings too—any chance you’d share your thesis on why it’ll pop?
MACKGforEver : props for nailing the IV crush on Tesla! I’m thinking of replicating your strangle setup for NVDA’s earnings
Keleo : thanks for the sharings. Good Insights
Echophi : HOOD’s IV’s been low—worth a gamble?
craw : Thanks for informative read.
74729609 : Dummy!
VanCan2025 : Tesla is above water for now due to having sold lots of carbon credits to other auto manufacturers, so don't be fooled - they're not doing as good as it might seem.
PaidinfullDom : how do I learn
OldAnCap : Dude, you're a genius at options trading. Your articulation of exactly how this options trade should go down is quite good. I'm curious, was it AI or did you write it yourself. Either way it's very well written imo. Even an options trading dummy like me can understand what you're talking about.
