July 2020: TSLA $1400 – $1405 Bull Call Spread



Trade Structure

$1400 - $1405 Bull Call Spread

Trade Date


Price Paid


Expiration Days



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Trade Rationale

As you know I don't trade earnings at all. But post earnings generates some really good opportunities. This post-earnings trade on TSLA may look slightly peculiar to you. This trade was taken right after earnings so it may appear to be a traditional post earnings trade at first glance. However, if you look at the charts, it doesn't match up with my typical post earnings trades at all. If you have tried to trade TSLA, you must know this is not an easy stock to trade. Although, I watch it all the time like a hawk, I am very conservative about getting into a trade with TSLA and unless it doesn't drop down to the levels which I am comfortable with, I just don't take any trades on it. In fact, the last trade on TSLA that we did in this group was back in May 2020 I have been watching TSLA ever since for another opportunity but it always seemed too rich for me to get in. After the recent earnings, TSLA shot up to $1689, and based on support/resistance I had already set my mind on a very aggresive target of $1430. Many members have asked me in the forum about potential trades in TSLA, and I kept telling them I woundn't touch it unless it hits $1430. In my opinion, Friday was a golden opportunity. The extreme and exaggerated downward push on TSLA was beautiful! Not only did it get down to $1430, but then it hit $1400 and went all the way to $1375. I got in at 1400-1405 call spread, but many of your got in even lower. Overall, I have a great feeling about this trade. So, congrats to all who got into this trade!

Trade Selection Criteria

Overall market movement

The market has been going up non-stop for weeks, and we got a quick pullback on Thursday and Friday.

No Earnings or Significant News

Earnings are behind us and were announced on 7/22

Bollinger Bands outside Keltner Channels

This is a post earnings trade – our regular mean reversion indicators don’t apply here.

RSI Analysis

This is a post earnings trade – our regular mean reversion indicators don’t apply here.

ADX Analysis

This is a post earnings trade – our regular mean reversion indicators don’t apply here.

Trade Analysis

TSLA chopped around for a couple of weeks after putting on this trade. If you had bought a call, you would have lost most of its value in this 2 week period. But the beauty of vertical spreads is that they are almost immune to time decay. Finally, when TSLA came out of its mini-consolidation period, we were able to close out this trade for a 94% profit.

Trade Outcome




Beginning Account Balance


Ending Account Balance


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