- The document discusses intraday trades made in Tesla (TSLA) stock on January 14, 2014 after it reversed from a double bottom pattern.
- Five call option positions were taken as TSLA trended higher throughout the day, with gains captured at points ranging from 1.5 to 9.5 points.
- In total, around 20 points of gain were captured from the intraday involvement in TSLA calls by taking advantage of the momentum and scaling in and out of positions.
1. TSLA Intraday Trend Trade
after Reversal off Double
Bottom
Deborah Knighton
1/14/2014
2. SMB TRAINING is NOT a Broker Dealer. SMB Training engages in trader education and training. SMB TRAINING offers a
number of products and services, both electronical (over the internet through smbtraining.com) and in person. SMB
TRAINING also offers web-based, interactive training courses on demand.
The seminars given by SMB TRAINING are for educational purposes only. This information neither is, nor should be
construed, as an offer, or a solicitation of an offer, to buy or sell securities. You shall be fully responsible for any
investment decision you make, and such decisions will be based solely on your evaluation of your financial
circumstances, investment objectives, risk tolerance, and liquidity needs.
This material is being provided to you for educational purposes only. No information presented constitutes a
recommendation by SMB TRAINING or its affiliates to buy, sell or hold any security, financial product or instrument
discussed therein or to engage in any specific investment strategy. The content neither is, nor should be construed as,
an offer, or a solicitation of an offer, to buy, sell, or hold any securities. You are fully responsible for any investment
decisions you make. Such decisions should be based solely on your evaluation of your financial circumstances. Such
decisions should be based solely on your evaluation of your financial circumstances, investment objectives, risk
tolerance and liquidity needs.
SMB Training and SMB Capital Management, LLC are separate but affiliated companies.
No relevant positions
Please note: Hypothetical computer simulated performance results are believed to be accurately presented. However, they are
not guaranteed as to accuracy or completeness and are subject to change without any notice. Hypothetical or simulated
performance results have certain inherent limitations. Unlike an actual performance record, simulated results do not
represent actual trading. Since, also, the trades have not actually been executed; the results may have been under or
over compensated for the impact, if any, of certain market factors such as liquidity, slippage and commissions.
Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight.
No representation is being made that any portfolio will, or is likely to achieve profits or losses similar to those shown.
All investments and trades carry risks.”
3. Big Picture
• Aftermakinganall time highonDecember 31st, the
SPY
consolidatedforsevendaysthenreversedloweryest
erdaymovingitout of itsconsolidation box.
• Todaytheoverseasmarketsweremixed in Asia and
were trading slightlylower in Europe prior tothe
open.
• Thefutureswere up
thismorningonbetterthanexpectedretail sales and
the SPY gapped up and
continuedtotrendhighertherest of theday.
4. The Big Picture
SPY reversed below the
bottom of the box
yesterday on above
average volume
5. TradeStrategy
• Trade a reversalon a longer time frame
• Waitforreversalconfirmationtoenter
• Getlucky! (Positive newscameoutafteralready
in thetrade)
• Tradetheintradayuptrend
6. Intraday Fundamentals
• TSLA tradeswith a Beta of 1.2, averagevolume of 10.6
million shares, and has an ATR of 7.4.
• TSLA has a short interest of 50.7%.
• TSLA isrankedby IBD as #1 in theautomotive sector and has
a grading of 72 78 97 C D D+.
• Therewererecallrumorscirculating in
themorningthatwerelaterclarifiedthatiswasfor software
updates, nothingto do withthefires.
• A headlinethat Tesla had 6900 car deliveries in Q4
causedthe shares to pop.
• ElonMusk’sappearanceon CNBC laterhelpedpropel TSLA
shares evenhigherthroughouttheday.
9. IntradayTechnicals
After the news pop TSLA
retraced back to VWAP where
it caught a bounce, then
trended up the rest of the day
News Pop
Retrace and
bounce off VWAP
Double Bottom
10. Reading the Tape
• I wasusingoptionsforthesetrades so I usedthe
tape toget a general idea
forwherebuyersweresupportingthebid and
wheresellerswerestepping in whenever TSLA
wasnear a keysupportorresistancelevel.
• I noticedthat TSLA put in a
doublebottomafterselling off
thismorning, thentraded up tothe flat line
whereitconsolidatedjustabove VWAP.
• Todaywasprettyeasytoreadthe tape
duetothevolatility and volume.
11. Trade Management
6
1.
2.
3.
4.
5.
6.
Bought 1 Call for 4.70 at 11:15
Bought 1 Call for 5.22 at 11:21
Sold 1 Call for 4.91 at 11:24
Bought 1 Call for 4.85 at 11:27
Sold 1 Call for 8.40 at 11:44
Sold 1 Call for 11.18 at 11:48
5
2
1
3
4
*Please note that the prices and other statistics on this page are hypothetical, and do not reflect the impact, if any, of certain market factors such as liquidity, slippage and commissions
First Position usingtheJan 24’14 139 Calls
12. Trade Management
2
1.
2.
Bought 1 Call for 4.55 at 12:12
Sold 1 Call for 5.18 at 12:19
1
*Please note that the prices and other statistics on this page are hypothetical, and do not reflect the impact, if any, of certain market factors such as liquidity, slippage and commissions
Second Position usingtheJan 17’14 142 Calls
13. Trade Management
2
1
1.
2.
Bought 1 Call for 3.50 at 12:21
Sold 1 Call for 4.97 at 12:37
*Please note that the prices and other statistics on this page are hypothetical, and do not reflect the impact, if any, of certain market factors such as liquidity, slippage and commissions
Third Position usingtheJan 24’14 150 Calls
14. Trade Management
October pivot low
1.
2.
Bought 1 Call for 4.63 at 2:30
Sold 1 Call for 5.05 at 3:00
1
2
Missed this move
After closing third position, I took
some tie to chill, eat lunch, and
watch a Playbook presentation
until about 2:00
*Please note that the prices and other statistics on this page are hypothetical, and do not reflect the impact, if any, of certain market factors such as liquidity, slippage and commissions
Fourth Position usingtheJan 17’14 155 Calls
15. Trade Management
2
1
1.
2.
Bought 1 Call for 5.90 at 3:16
Sold 1 Call for 7.05 at 3:29
*Please note that the prices and other statistics on this page are hypothetical, and do not reflect the impact, if any, of certain market factors such as liquidity, slippage and commissions
Fifth Position usingtheJan 24’14 157.5 Calls
16. Trade Management
3 points
October pivot low
2 points
4 points
9.5 points
1.5 points
20 points total
captured
*Please note that the prices and other statistics on this page are hypothetical, and do not reflect the impact, if any, of certain market factors such as liquidity, slippage and commissions
Summary of IntradayInvolvement in Calls
17. TradeReview
• I wasveryhappywithmyentries and exitstoday trading TSLA.
• I struggledwithwhetherthetradesweregoingto be intradayonlyor
swing. I am contentwithmy final decisiontogo flat TSLA at theend of
theday.
• Aftergiving up allmyprofitsyesterdayonmy swing positions, today I
wascompletlyokaywithmissingoutonsome of themoves. There are
plenty of tradesoutthere and I am muchlessstressedwhen I am in
thetradeonlywhenitisgoingtherightway.
• I usedtwocalls in thefirst position toscale in and out. Later I
onlyusedonecall as thetradeswerebasicallymomentumscalptrades.
• Thesetrades are scalable. Whenmy portfolio increases I can put
more money at risktoenterthetradeswith more calls and addtothe
positions.
Notas do Editor
*Please note that the prices and other statistics on this page are hypothetical, and do not reflect the impact, if any, of certain market factors such as liquidity, slippage and commissions
*Please note that the prices and other statistics on this page are hypothetical, and do not reflect the impact, if any, of certain market factors such as liquidity, slippage and commissions
*Please note that the prices and other statistics on this page are hypothetical, and do not reflect the impact, if any, of certain market factors such as liquidity, slippage and commissions
*Please note that the prices and other statistics on this page are hypothetical, and do not reflect the impact, if any, of certain market factors such as liquidity, slippage and commissions
*Please note that the prices and other statistics on this page are hypothetical, and do not reflect the impact, if any, of certain market factors such as liquidity, slippage and commissions
*Please note that the prices and other statistics on this page are hypothetical, and do not reflect the impact, if any, of certain market factors such as liquidity, slippage and commissions