TSLA Trade on Dec 7, 2020 15:50 from Marius: Tradervue User Stock Trades.

Markets opening the week flat. First Monday in 5 weeks that has not have positive vaccine news. Covid cases are still high and the re-opening optimism along with it. Fixed income started to see a bid in bonds and precious metals but overall still reverting from making new lows on the daily.

Fundamental Analysis

TSLA has been in a breakout momentum uptrend since the announcement of the inclusion to the S&P 500 on Nov 16. A lot of positions ahead of the rebalance to take place at the end of the month. Until then it looks like there will be a stronger bid in the market with that. It has been a leader in the EV space the whole year with 2nd and 3rd tier companies following.

Quantitative Analysis

Intraday Fundamentals

RVOL 1.35
AVOL 41.678M
ATR 27.38
Short Float 5.05%

Options Statistics

SI 1.455
IV 93.39%
IVP 38%
P/C Ratio 0.518
VWAP 629.764

About double call side trading for today. Thinking buy side with 34% trading at 41-60 delta. On the put side 49% were trading at 0-20 delta and thinking this is more selling. Higher delta on the put could show more hedging but that wasn't the case today.

Options Positioning

OI 1,479
Vol 1,517

Delta -.02
Theta -.28
Vega .03
Gamma .00
Prob T 4.23%
Prob ITM 2.17%

MMM +/- 48.147
IV Series 82.67%

500 would the area of highest liquidity analyzing the order flow. I selected a strike below as the overall underlying bid has been strong in the market. Anticipating a pull back to a mean but has yet to be confirmed. Chose selected 480 managing more risk moving forward and knowing there was not an additional catalyst for this breakout. May have to hedge the position and sell calls if it does turn.

Implied Volatility 1Y

Noting the increasing volatility but to a lesser degree compare previous breakouts and run-ups. This may have to do with the overall market volatility but keeping in mind that it is rising and can rise further with shorter to mid-term reversion.

Tape Reading

Noting the volume of the orders in the 550's to 600's but can't really infer if it is implying any direction. Just noting the liquidity and then using the options statistics for additional directional direction.

Technical Analysis

Noting the Big Dawg Trade breakout set-up here but keeping in mind how much it has moved already. There is notable buying volume today opening the week and close at the highs including trading higher in the after hours. AVWAP was placed on day after of news announcement denoting average positions since. A test and breakdown of the recent consolidation would be the first sign that I will act on and mitigate risks. I'm anticipating continuation seeing this consolidation and volume opening into the week. The underlying bid is relatively strong with the current market.

Trade Management

TSLA announced another 6B offering at the market. Price sold off and found aggressive support at 625. It was bid up into 650 but now below in the after hours and in a possible 625-650 range. This could form into a back side short but gauging where it trades tomorrow to see if the buyers will still be in control. I thought about adding to the position but chose not to recognizing that direction can change in the 2nd day. If buyers hold up tomorrow I will add to the long. If 625 breaks I will manage the current position and possibly add a short.

Trade Review

Exited the position at pre-planned risk management + re-positioned capital towards a better opportunity in my playbook that is followed up after this review. Back side short was in play in the AM with the strong market sell-off and mega cap tech leading. 625 MTF support was sold into. 600 breached and now trading under HTF support. More risk to the downside here along with the markets making a strong turn which was anticipated. As far as managing risk I waited for a bounce to take place to exit the position. The momentum and buyer support wasn't strong which in after hours traded lower. I wanted to get short with large size seeing the overall momentum. Cut the position at a 0.43R loss but now in almost full size on a market play trade short.

I managed this better than my previous loss on NFLX in Sep when the markets turned similarly. Could have acted faster but was waiting for more confirmation. I was actually off the desk when my alerts started to go off. The quant model was still showing that the trade would close out fine as of that moment and the close. I wasn't going to sit in a position waiting for the model to confirm what could potentially become a bigger loss based on my own discretionary analysis. This was also being able to re-position in an even larger trade that would yield more R and have a higher probability based of the models and my own variables.

Even at a small loss I'd grade this trade as a B because it was executed as planned/anticipated and as adaptive as I could be at that moment and my current development. Risk management is job number one and making good trades after good trades to stay sharp and growing.

Additional Technical Analysis Review

This could also be seen as overhead supply at 625 + 600 more notably.

Additional Review

Although risk parameters were executed as planned, keeping in mind the model stayed correct in this situation. The steep sell-off accompanying the 5B at the market offering with momentum was the main risk. The models may have calculated this in but I won't know for sure. The sale had been completed that day as price flushed into 570 and found a re-bid and buyer control closing above key 600 breakout level. This is interesting seeing the fundamental developments within offerings and with TSLA in particular. The indexes will still be buying into positions next week and the notable quarterly rebalance. Just have to observe how shares are exchanged with funds already in position with plans to sell and buyers to establish new positions. Overall bias is higher especially if 600 holds but it is dependent on overall market development being tied into rebalancing and reallocating for the quarter and year end. In my current playbook development it may be more wise to allocate the active trades into the indexes because institutions can move individual stocks more notably. Will keep it in mind going into next week but open minded. Can also still utilize back testing and why not going into the new year ?