Trade Update – Closing $TSLA Dec put spread for a profit

by CC October 14, 2015 12:55 pm • Commentary

A few days ago I wrote (read here) about the situation with TSLA, our trade and how we’d prefer to manage it with it not expiring until December. The past few days has seen the stock open lower but it’s clear the stock is starting to find buyers. Yesterday saw a pretty impressive rallies off the lows and today the stock has spent most of the day in the red but recently looked like it could make a run higher.

Screen Shot 2015-10-14 at 10.37.29 AM
TSLA 5 day chart from LiveVol Pro

After seeing these bounces our concern is that the stock could have a move back towards its 2o0 day moving average in it. Although our trade is in December and we still believe this stock is a short over the next few months we’ve decided we want to play a little defense with our profits. So here’s the update:  

Action -Sold to close the TSLA ($220) December 230/180 put spread at 18.00 (a 5 dollar profit)
  • Bought to close 1 Dec 180 put for 4.30
  • Sold to close 1 Dec 230 put at 22.30

Rationale – we have some profits in this trade but after such a sharp move lower we’re nervous of the stock finding some buyers around the 220 level. We’d love to get back into a similar trade higher.