Nov 2019 – TSLA $347-$337 Put Debit Spread

Trade Structure
$347 - $337 Put Spread
Trade Date
Expiration Days

Trade Rationale

With earnings behind us on 10/23, TSLA shot up to the moon. I put on an earlier $320 - $310 Debit Put Spread trade for a short 17 days to see if TSLA gives up some of those gains and normalizes a little. The trade went in my favor immediately, however, after the "China Deal", the market kept roaring higher and TSLA reversed and just kept going against me. My directional bias hasn't changed at all and I still think the market is overdue for a correction. Hence this new trade. A TSLA $347 - $337 Put Debit Spread for $483. My directional bias is based on my simple trading principles and I always stick to it. Sometimes, I lose money on my trades, but that is part of the game. The overall goal is to win more than you lose. That is how you come out a winner in this game.

Trade Selection Criteria

Overall market movement

Market just hit an all time high with SPY touching $309 for the first time.

No Earnings or Significant News

Earnings are behind us and were announced on 8/23. There is no significant news or earnings event during our trade cycle.

Bollinger Bands outside Keltner Channels

Bollinger Bands are outside Keltner Channels. We are not in a squeeze or low volatility period.

RSI Analysis

RSI is in overbought territory. Although, inconclusive and not giving any clear signals. 

ADX Analysis

ADX being a lagging indicator is not showing anything conclusive. However, DI+ line is curving down and could indicate a loss of positive momentum

Trade Analysis

We got into this trade with a good gut feeling. Notice that, ADX was not in our favor though. After putting on this trade, TSLA never really gave us the opportunity to take any profit. It got stuck in a range for some time and then went on to make new highs. I had to close this trade when I lost 50% of my initial investment. i.e $248
Trade Outcome
Beginning Account Balance
Ending Account Balance

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