TSLA earnings are right around the corner. TSLA, a car company, is both overvalued and is struggling to create profitable cars (most of their profits come from EV credits that they sell to other companies that produce gas cars). As more car manufacturers (record this year) enter the space, there is 1) more competition for TSLA's 2) less demand for EV credits. TSLA, idiosyncratically, is also seeing lower demand for their cars and we see bits of Musk come out with "recession is here" probably reflecting updated projections.
Earnings lines up with what could be the end of the consolidating triangle(a nice little catalyst break to down side). The one difficulty I'm finding here is how to short this. Deep OTM Put Leaps run in the 100 vol category making them super expensive. I currently like shorting ARKK as I think they are heavily overweight TSLA, and when there is poor earnings they will see further stops trigger on the way down. The ARKK beta to TSLA is reasonably high and has slightly cheaper OTM puts.
If anyone has any good structures on how to trade this - open to hearing them!
Earnings lines up with what could be the end of the consolidating triangle(a nice little catalyst break to down side). The one difficulty I'm finding here is how to short this. Deep OTM Put Leaps run in the 100 vol category making them super expensive. I currently like shorting ARKK as I think they are heavily overweight TSLA, and when there is poor earnings they will see further stops trigger on the way down. The ARKK beta to TSLA is reasonably high and has slightly cheaper OTM puts.
If anyone has any good structures on how to trade this - open to hearing them!
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(Chart is lognormal)
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Trading quite nicely in the channel. Lots of good catalysts coming up - potential forced acquisition of Twitter by Musk, or even earnings.