NaughtyPines

EARNINGS PLAY: IF YOU MISSED PCLN, THERE'S STILL TSLA

NASDAQ:TSLA   TESLA MTRS INC
Too scared to iron condor PCLN? Well, there's still TSLA             , which announces earnings after the close tomorrow.

Typically, with earnings plays, I wait as long as possible to enter my trade: regardless of whether it's before or after the bell, I try to enter the trade at the last possible moment (ordinarily, the NY close immediately preceding the announcement), so that I don't get caught in all that jockeying ... . Additionally, I try to keep my bias largely neutral, since I neither know what the announcement will be and don't really know what the market reaction to it will be.

Since I'm a seller of premium, I'm looking for the inevitable IV contraction that occurs immediately post earnings, so the vast majority of my earnings plays are either short strangles or iron condored short strangles. Because of the price of the underlying in this case, I'm going with an iron condor:

Aug 7 expiry (3 DTE             ) 230/237.5/295/302.5 Iron Condor
POP% -- 69%
Max Profit/Loss: $150/$600 per contract
BE's: 236.00/296.50

Notes: After fill, look to take the trade off in its entirety at 50% max profit. Due to the short time you have between entry and expiry, plan to roll any tested side fairly immediately for duration and credit out to a later expiry prior to expiration and allow the untested side to expire worthless.

If you don't like be under the gun that a 3 DTE             expiry entails, consider setting up a similar play for the Aug 14 expiry, which will give you additional time to deal with rolling should price breach one of the sides of your setup.
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