Thank You Tesla

by JDH on April 6, 2019

Way to go, Elon.

The stock was being pumped up ahead of production numbers, which were disastrous, causing a drop from a high of $296 on Wednesday to a low of almost $260 on Thursday.  Nice.

My play was simple.  I hold puts, and on up days I buy more.  So, for example, if I want to own 40 puts (expiring six to eight weeks from now, $30 out of the money or so), I buy 10, and if it moves up, I buy 10 more, and keep averaging down until I have my 40.  On the big up day on Wednesday I bought more.

On Thursday I sold them all.

Thank you, Elon.

And then, as if I’m crazy, on Thursday I bought CALLS!  On Tesla!  And, sure enough, it bounced on Friday, and I sold them, so as of now I have no position in Tesla.

As you can see from the chart, we are in an obvious down trend, and right now we are in the middle of the range.  Could go up, could go down, which is why I have no position.

If Tesla gets back to $290, I’ll start buying puts again.

Bigger picture, I plan to use the months of April and May to raise cash.  “Sell in May and go away”.  The market is looking frothy, I’m up a lot this year (thanks to my pot stocks), so time to not get greedy.

Still holding gold.

That’s the update.  More next week.