TSLA Earnings - 7/20/22 - Playing TSLA FDs like a smarter degenerate

Hey guys!

TSLA earnings are coming up. TSLA FD’s are great fun to play and also big sadness to play if you don’t play it the right way. I’ve made a good chunk of change off of TSLA earnings in the past and I wanted to take a moment to share my wisdoms (for whatever they’re worth) and also solicit feedback from each of you.

Bit of a precursor, there are a few things you should know so that when I reference them you know what I’m talking about:

  • Conq graciously turned on Trade Ideas for TSLA earnings so we all see alerts now
  • Vega is a measurement of how much an options premium changes as IV increases
  • Delta is a measurement of how much an options premium changes as the underlying price changes (many of you know this already)

Earnings Phases
There are two almost surefire ways to play earnings for high visibility tickers like TSLA:

  1. Pre-earnings Vega + Delta rides
  2. Post-earnings Delta rides

I want to discuss both of these, plus how to play them appropriately so people don’t get burned.

The day prior to earnings when you have less exposure to Theta, Implied Volatility will build and carry an options premium higher as more people buy into that option. While an oversimplification, for sure, I look at IV as being a measure of supply and demand. The higher the IV, the more representative of a high demand and limited supply. That means that people will associate a higher intrinsic value to the options, which of course means that you will pay more as well.

The key to playing the Vega pump of a pre-earnings play is to:

  1. Identify the trend early. The trade ideas will help with this using the !signal command (please use Bot Spam Channel)
  2. Only play the day before the earnings are released. Theta on the week of earnings is a bastard and will wreck you
  3. Secure your profits before the market flattens, and DEFINITELY before the close of the trading day

If you follow this and play the trend (not what you think it’s going to do), you will benefit from more people pouring into that strike/expiry increasing the IV, vega, and premium, and also the natural benefits of Delta in the event that the IV play doesn’t work out for you.

Post Earnings
This is a simple delta play. Play into the trend. Don’t position on what you think it might do, just do what it is doing. Wait for the trade ideas to publish a change in sentiment and position yourself into the trend. A good rule of thumb that I follow:

  1. Find your afterhours/premarket high or low.
  2. Position yourself at that dollar amount in the call/strike position. If earnings are bullish and it peaks at $800 afterhours or in the premarket and then sells off at open, at the bottom take an 800C.
  3. There’s a good chance it will get back there, but always sell when you see profits you like, and keep your eyes peeled for trade idea exit points

That’s the start of this conversation. Please feel free to contribute as you see fit!


Side note, to keep it clean and because it’s of a short term relevance, I have set this thread to close and archive at close of market on 7/21.

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Thank you for all these tips. I really hope to finally play TSLA earnings for my first time. Your points sound very logical and hopefully if we follow them we will profit nicely!


I really like this and will be looking at my port to play this type of action. I don’t dance well with tsla so this will be a new strategy for me and I’m excited :statue_of_liberty:

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TSLA earnings were so/so. Not really great, there was an EPS beat, a revenue miss, questions about free cash flow, and a whole lot of “we’ll be great if these series of very specific things work out in our favor”.

This thread is set to close tomorrow as it will no longer be relevant, but as a recap there are two ideal outcomes and one boring outcome of how TSLA options can be played tomorrow:

  1. Most Ideal: TSLA has big movement during the earnings call (starting at 5:30PM EDT). Tomorrow morning, the markets trend in the opposite direction of that big movement. TSLA reverses to the directional move of the markets, and then reverses again to premarket/after hours levels.

Example - TSLA continues to burn, but the market opens green. I would expect/hope TSLA to then reverse to green, find a top, and then reverse back to the premarket levels. That top would be the ideal time to take weekly puts as close to those premarket levels that you can afford.

  1. Less Ideal: TSLA has a big movement during the earnings call. Tomorrow morning, the markets trend in the same direction, but TSLA’s movement outpaces the market movement. TSLA reverses while the market catches up, and then trends with the market for the remainder of the day.

Example - TSLA continues to burn and manages to catch the whole market in its wake. TSLA opens, say, -3% whereas the markets open -0.5%. At a point TSLA selloffs will pause, trending up while the rest of the market continues to trend down. At equilibrium TSLA will become SPY correlated again and find it’s lows through the normal course of the day.

  1. Not ideal at all: TSLA stays flat and stays perfectly SPY correlated throughout the remainder of the AH/PM, and continues it’s correlation throughout the early hours tomorrow morning.

Example - Pretty straightforward. If this happens maybe don’t play it tomorrow, look to other broader markets for something less theta exposed and try to make money there. TSLA options may not be worth the time, especially for smaller ports.

Just my thoughts guys, feel free to chime in with your own opinions too!


For some context on historical free cash flow headlines for TSLA for previous quarters:


Keep an eye on it, looks like we might get option 1 which is the most ideal.

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