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Tesla Calls On A Friday That Expire On Monday

It's the same topic I posted last Friday. Today is Independence Day and the markets are closed. For this reason we can't really talk about mimicking last last Friday's trading. Here is it's five day chart. As you can see Tesla dropped on Thursday. Here is a look at how one series of Telsa's Puts traded on Thursday. Now look at the pricing on this one series of "slightly-out-of-the-money" Tesla Calls as of Thursday's close. These Calls would let you be in all of Monday's trading action. Is the price of $4.60 a contract a fair price? Well consider these two points. One day swings in stocks in general in the $400.00 price range can be significant. This five day chart of Tesla below shows you how it jumped $32.13 last Monday! The second point is that long weekends (three full days of no market trading) are know to cause market resets. Stocks like Exxon can get whipped around. That's what makes the pricings on all options now so difficult to gau...
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Towards Understanding Tesla Calls.

First, forget everything you know about Tesla's current state of operational history. Forget their news about their new factory in Germany, their new models and how many kids a fifty four year old fellow named Elon Musk has. Focus on the moment. In this case it's a Thursday afternooon and we are looking at options on Tesla it that expire the very next day. The interesting thing in this situation is that we are catching Tesla trading flat on the day. It has maintained for the last 2.5 hours a slight predisposition to the upside.
Now this as we approach 1:00 p.m.. We find a price of $4.70 for the Call option shown above. These Calls are just slightly "in-the-money" and expire the next day. Things could change even before the end of the day. It takes big money to buy in and the risk is high. I get it. The Puts will also cost you chunk of money. It's Tesla and you are trading with some of the most aggresive option players in the world. Yet wait. We all know that this stock can go up or down ten or fifteen dollars in any given day. It often does. Now let's move on and comment on the following two printouts which came out twenty-two minutes later.
$465.00 is now $655.00! Let's now focus at this chart at at 1:35 p.m.
It has had a very comfortable uptick in a very short period of time. Are Thursday afternoon sweet spots in the exercise of "one-week-option" trading? Well consider this. It is well recognized that U.S equities have 25% to 40% of a stock's trading volume occur in the last hour of the regular trading sessions. GETTING OUT OF POSITIONS BY 3:00 P.M. reduces the risk of getting caught up in any unexcepted mayhem. There is however a reverse to this logic. Getting out cuts you off from participating in any explosive moved to the upside on Fridays which tend to be a very volatile time of the week. Yet then again you can't have your cake and eat it. Here is how Tesla and it's 417.50 series of Calls closed out the day.
For interest sake, let's see what happens tomorrow. Can you see how you don't really have to know very much about Tesla to play options on it? You just have to learn to recognize it's sweet spot. That's my take on it.

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