I want to deploy an options strategy to use this emotional overreaction as an opportunity to add to my Tesla position.
However, when coupled with the second consecutive quarter that Tesla missed earning expectations, nearly $100 billion in market cap rapidly evaporated.
The trade The option strategy that I will utilize is a credit spread, better known as a risk reversal.
This credit spread can be established by selling an at-the-money put and using the premium collected in writing that put option to buy an upside out-of-the-money call.
DISCLOSURES: (Long Tesla, sold risk reversal) THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY .
Persons:
Tesla, Elon, Musk, overreacted
Organizations:
Elon
Locations:
Tesla