FAQ: Is there an easier way to trade TSLA calls without having to be constantly focused on stop placement? A: Auto-Pilot Auto-Pilot is a label I am giving a suggestion for an alternative trade management approach to trading TSLA calls. Try as we do, there is no magic stop placement strategy that will garner the maximum profits from any individual trade while at the same being the perfect elixir against losses, i.e., either absolute or a portion of what has been gained during an open trade. The primary reason for a 50% trailing (or fixed) stop is preservation of capital. One way to accomplish that same end is to preserve it up front by halving the amount used to take any TSLA trade and then forego any stop whatsoever. By using this money management strategy TSLA can be traded without the day-to-day angst about being prematurely stopped out of a position. In a nutshell: Instead of buying $5,000 worth of calls subject to trailing or fixed stops, buy $2,500 worth of calls and "let it ride." Even if that means buying only one call, it is the amount of money at risk, not the number of calls, that matters. The tables below show all of the TSLA Buy Signals since December, with the shaded rows Buy Signals that would have been taken and traded without a stop. An unshaded row means that Buy Signal was passed upon because the prior Buy was still being held. Calls are held until the last week of expiration when the door opens for new Buys that will be executed to replace the then expiring calls. Note: The Jan 2021 calls are a long term position and not subject to this discussion. We are addressing only the second TSLA call positions, the Intermediate (Premium Service) and the Short-Term (PRO Service) Trades. "Auto-Pilot" Trades-Only Note the extraordinary percentage returns in these Auto-Pilot trades below. While half a normal position may have seemed like a small trade on execution, it didn't stay small for long and it would have allowed for the follow-up trade to be "half" of a very large sum. One-size just doesn't fit all when it comes to individual option traders. The same money-management rules that work for one trader may not work at all for another. When in doubt, dummy-down strategies. Auto-Pilot is one way, 50% fixed stops is another, 50% trailing stops a third. Under the forecast of TSLA reaching $1,500 by Christmas, any one of those trade and money management strategies will work. Chose which fits your psychology and account size the best. Trailing Stops Continue in the Performance Table While watching Auto-Pilot in real time, the Trade Tables will continue to apply the 50% trailing stops and track all Intermediate and Short-Term Signals. For those utilizing Auto-Pilot. ignore the stop column as expiration week is all that matters.
