We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Image: Bigstock
Tesla Butterfly Update
With 1.5 hours of trading left on expiration Friday, our Tesla butterfly trade has worked exactly as well as it could have, with the shares hovering right at our short strike.
At this point, rather than risk what I've made in order to capture the last few crumbs of time decay, I'm going to (mostly) close the trade.
I'm going to buy back 2 360 calls for $1.50 each and sell 100 shares of stock at $360.50.
This eliminates all risk on the trade, as I will no longer be short any options.
The total profit on the trade at this point will be $23.90 per spread, not bad for something that onlly cost $3.60 a week and a half ago.
Plus, just in case something really crazy happens and the stock goes lower than $330 or higher than $390 before the markets close, I will still be able to buy or sell 100 shares, respectively, and add a bit to my profits.
Happy Friday!