Shares of Tesla (TSLA) are rallying sharply following earnings that missed badly. Tesla is struggling to break past the 20 day moving average. More importantly, implied volatility is now at only the 1% percentile, meaning options are dirt cheap and complacency high.
Let’s take a guardedly bearish stance that is net long vol with a put diagonal.
TRADE IDEA
Buy to open TSLA 8/16/2019 $240 puts
and
Sell to open TSLA 8/9/2019 $237.50 puts
for a $3.00 net debit