All members of the service should have some exposure to Tesla by owning the shares outright and/or holding one or more combination of calls; long term, intermediate term, and/or short-term (the PRO Service entered a short-term position on Monday). Earnings are due out after the close on Wednesday and the stock could rise or fall significantly. Seven out of the last eight earnings reports have resulted in gaps, either up or down, of 10% or more and the reaction to this report has the potential to eclipse all of the past reports. That reaction will not only be based upon the actual numbers, but more importantly management's outlook for the rest of 2020. Although I expect it to be over the top, anything less than over the top could send the stock, at least temporarily, under the bus. I've been reviewing ways to hedge against a worst case basis. I've never been a fan of complicated option strategies, especially ones that are designed to limit risk at the cost of limiting gains. After a cursory look at the various strategies that would do just that, it makes much more sense to simply trim TSLA position(s) to where you would be comfortable with a (temporarily) worst case scenario. Benefits (1) It's not complicated; it doesn't take a super computer (simple arithmetic will do); (2) It doesn't limit gains in the case of a best case scenario; and, (3) There should be no loss of sleep Wednesday night. If you believe in the long term valuation of $1K+ this year and 3-4X that in the next few years, there is nothing to do other than don't be overextended in shorter-term calls (Feb-Mar). As an aside, a strategy that I am using myself and suspect many subscribers are as well is that when I exit profitable calls and rollover to a new month or new strike, I take some of the gains and buy shares. The idea is to build a stock position basically for free. Tesla shares are up 40% YTD, a return that many would be fine with annually and there is no reason to expect this uptrend to end anytime soon. Wednesday is nothing but a short-lived spin of the wheel, red or black.
