Wednesday
Oct 21, 2015
1-855-RWT-0008
Prepared by the good people at Random Walk, LLC. (and Scott)
Great Morning!
Closing Prices From Yesterday
Yesterday and Today
YESTERDAY
It was pretty much as I had guessed. The broad market fell enough to test the previous day’s lows, but other than that it was a non-event. The Dow was only down 13 points as a couple companies in the Dow propped up the index compared to what the real overall market was doing.
The real stand out yesterday was TSLA. The stock was quiet all morning until Consumer Reports announced it was not going to praise TSLA cars anymore. From there the stock fell a little bit more every few minutes. Eventually the stock fell to a low of $202 (from a high of $228.60). Yes the stock was down $26 at one point (over 10%). Then late in the afternoon the stock started to climb when people like my self realized ā Who the hell is Consumer Reports?
I think that was the magazine my dad use to read, or at least place on top his Playboy,, when I was a kid. The stock eventually closed down 15, running up $11 points off the lows. POT people, read below in the POT section as we kicked some butt in this name.
TODAY
In the after hours markets the futures are a little lower but I am not taking too much stock in that. This market had a lot of crap news and could not sell off that much. I would not be surprised if the market fell to Dow 17000 and SPX 2000, but for today I suspect we will be quiet and a little higher.
It was an exciting over reaction in TSLA today. Really? TSLA really fell 26 points (11%) because some jealous idiot who was not greased enough at Consumer Reports doesn’t want to cover the TSLA anymore? Three months ago it was the ONLY car that got higher than a 100% by the rating agency, and now (probably after buying puts) the company hates it?
We started out on the 13th buying naked long calls. On the 16th we saw the stock run up, so we turned the long calls into a short butterfly/BWB of sorts. We essentially took in $5200. So in all the chaos yesterday I was able to ābottom fishā comfortably, though I would have done it anyway.
We went in when the stock was t 203-204 area and bought the 207.5-217.5 call spread. As you can see from the graph below the stock then bounced $11.
From here?
What do I do now? Do I turn this into a condor for a credit, a wide condor for free, etc? Or do I let it go and try to make $7,500? I will see how things go from here, but I tell you one thing……it is nice when lucks works our way for a change. Between last Friday’s nice morning SPX mark putting long 30 contracts of calls spreads ITM for us, and now TSLA, we are doing real well. This month has been a good year.
Expect more shots like this between now and the end of the year.
POT is held each Wednesday night at 7:00pm eastern.
Contract the office at 1- 855 ā RWT ā 0008 for more details.
I have been saying the same thing for months. Thanks for agreeing with me Warren. I now feel vindicated. At least now I can take the hate mail about this thought, and send this clipping.
Too True To Be Funny
Attorney Stuff
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