Tesla announced their new Model Y last night. This new model should produce great profits for Tesla for years to come and will probably be produced much faster than anyone expects because the doubters remember how long Tesla took to mass produce the Model 3 and they are wrong expecting the same for the new Model Y.
Regardless of Tesla's future, it always trades the same on Friday's after a funky Thursday release of news whether good or bad. On Thursday, Tesla's stock ran up a little, but pretty much ended the day unchanged. The market didn't like the release of the Model Y despite the company almost did it perfectly if Elon Musk didn't stutter so much throughout the presentation. So let's break down how it trades.
Tesla opened down from Thursday's close and fell down after that. It fell quickly, had a small tooth up and fell further down. If you didn't get out of your Put options there, you would have to wait until 3pm to get out for close to the same profit. After the bid drop, Tesla moves up about half of the move before falling for the rest of the day. I would not recommend buying the morning bounce unless you were willing to sell it quick when it hits the morning top.
I recognized this pattern as it has happened many times in the past year with Tesla. I let my emotions get in the way and didn't pull the trigger properly. I bought near open, sold afraid of the bounce up, bought again when heading down, didn't sell quick enough at the morning bottom and finally I was not patient enough to wait for the afternoon bottom.
So since there is a downward Friday pattern, there is a following week pattern too. Typically, you could buy a call for the following week and be happy on Monday as it is oversold for the same reasons why it gets bought the following week. As long as Elon Musk doesn't go Twitter happy next week, I would expect to hear some good news like Tesla has produced 5k Model Y's over the weekend. I would look to buy calls near open and sell on the upside and don't play the downside during the week. You should get additional opportunities to buy more calls at a lower price the next day. I don't like hoding over night on Tesla because you will get burned.
Obviously traders are not in charge of the stock of Tesla. Algorithms and computers are in control of the trading of Tesla. Day traders only add to the fuel, but don't determine what happens with the stock of Tesla. It is unfortunate, but I write this blog in hopes to help someone, but most importantly try to improve my own trading to avoid making the same mistake and profit by these moves. I should have been up over $800 from Tesla alone, but because I let my emotions weigh more than my knowledge of the stock, I was down $200 in my Tesla put options today.
Thankfully I did not make the same mistake with Alphabet (GOOGL) this afternoon. I got in a little early and when my Put options got in the money, I did not set my limit order and missed out on half of the profit. I am thankful to be able to trade another day and hope to be more patient every day and to go with the flow while not marry my positions.
Regardless of Tesla's future, it always trades the same on Friday's after a funky Thursday release of news whether good or bad. On Thursday, Tesla's stock ran up a little, but pretty much ended the day unchanged. The market didn't like the release of the Model Y despite the company almost did it perfectly if Elon Musk didn't stutter so much throughout the presentation. So let's break down how it trades.
I recognized this pattern as it has happened many times in the past year with Tesla. I let my emotions get in the way and didn't pull the trigger properly. I bought near open, sold afraid of the bounce up, bought again when heading down, didn't sell quick enough at the morning bottom and finally I was not patient enough to wait for the afternoon bottom.
So since there is a downward Friday pattern, there is a following week pattern too. Typically, you could buy a call for the following week and be happy on Monday as it is oversold for the same reasons why it gets bought the following week. As long as Elon Musk doesn't go Twitter happy next week, I would expect to hear some good news like Tesla has produced 5k Model Y's over the weekend. I would look to buy calls near open and sell on the upside and don't play the downside during the week. You should get additional opportunities to buy more calls at a lower price the next day. I don't like hoding over night on Tesla because you will get burned.
Obviously traders are not in charge of the stock of Tesla. Algorithms and computers are in control of the trading of Tesla. Day traders only add to the fuel, but don't determine what happens with the stock of Tesla. It is unfortunate, but I write this blog in hopes to help someone, but most importantly try to improve my own trading to avoid making the same mistake and profit by these moves. I should have been up over $800 from Tesla alone, but because I let my emotions weigh more than my knowledge of the stock, I was down $200 in my Tesla put options today.
Thankfully I did not make the same mistake with Alphabet (GOOGL) this afternoon. I got in a little early and when my Put options got in the money, I did not set my limit order and missed out on half of the profit. I am thankful to be able to trade another day and hope to be more patient every day and to go with the flow while not marry my positions.
