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Rolling TSLA Call Bear Spread: Increased Risk, New Expiry Date, and a Hedging Strategy | June 2023 Trade Update
On June 7th, 2023, for the second time this month already, I rolled up and rolled forward 1 call bear spread on TSLA stock turning it into a call ratio backspread with a new expiry date on June 26, 2023.
I was holding a 220/230 call bear spread with June 16th expiry, but as TSLA cracked 220 and even threatened to go over 230, I was left with no other options than to close this position with a huge loss or try to roll out and close this position with a smaller loss.
I opted for rolling, thus this also means I increased the risk. Significantly.
here is the trade setup:
BOT 1 TSLA JUNE 16 '23 220 Call Option 12.59 USD
SLD 1 TSLA JUNE 16 '23 230 Call Option 7.01 USD
SLD 1 TSLA JUNE 23 '23 255 Call Option 2.44 USD
BOT 2 TSLA JUNE 23 '23 300 Call Option 0.35 USD
Here I bought back the 220/230 strike spread and sold a new call ratio backspread with strike prices at 255 and 300 with expiry on June 23, 2023.
The aftermath of this trade is -$388 (if options expire worthless)
Additionally, I sold a put bull spread to hedge this position and recover some losses:
SLD 1 TSLA JUNE 16 '23 215 Put Option 2.60 USD
BOT 1 TSLA JUNE 16 '23 200 Put Option 0.63 USD
In case put spread will expire worthless, I will book:+$195 in options premium
What happens next?
Now to keep this trade under control TSLA should trade above 215 and under 255 by June 23.
In total: 20 trades since April 18, 2023
Options premium: -$68