After soaring the past few weeks, tech rebounded back to Earth. This week we saw a big reversion for Tesla and Microsoft, as earnings either met expectations or slightly missed. Thankfully, my Tesla covered call counter-balanced the negativity and put me back in the green.
We're only a few days away from the Presidential Election. All eyes are on Tuesday November 5.
This isn't meant to get political so I just want to focus on the potential financial gains part. Also, this is not financial advice, do your own research, I am not your financial advisor, etc.
Based on the latest public polling data as of today, it's essentially a coin toss on who wins the presidential election (note: the polls are based on the public vote outcome). Robinhood recently launched a feature where you can now bet on outcomes. I got access to it earlier this week and figured, why not try it out. Very simply to use, in fact, way simpler than buying a stock or option. Only 2 clicks to fields to confirm your quantity and price, then swipe up to place the bet.
Assuming there is in fact even odds for either candidate to win, it seems to me then that Robinhood's Kalama bet of $0.42 is a good trade. Again, based on today's polls, it's a 50/50 outcome, so the contract should cost $0.50 but it's currently trading at $0.42 -- a potential gain of $0.08 per contract.
In terms of the actual payout, we'll find out on the night of November 5 which is less than a week away. I haven't been more interested in the presidential election than now (all thanks to Robinhood!).
This is not financial advice. Do your own research. Consult a financial advisor. I am not your financial advisor.
I opened an options position today by selling 1 call with a strike price of $300 and expiration date in Dec 2025 (more than a year from now). The option premium was $51 when TSLA's current price is $267. At almost 20% upside, this felt like a good low risk trade.
In all of Tesla's history, it has traded above $300 only for a short period of time. There's a chance I could get assigned but given the upside and history, it seems unlikely. Even if I do get assigned at $300, with the options premium and strike price I would make 1.9x my money which is pretty good for a 2 year hold. With this week's runup, thanks to a great earnings call, I think the stock is temporarily overbought so I want to monetize some of that euphoria. That being said, I do plan on holding Tesla for at least a decade.
Here's a really good example of time decay that happens every day with options. This option expires on Friday Sept 20 and is currently OTM:
