I am only going back to January 1st, 2021 because this trade has been working for me during this time. I will keep trading it until it no longer works then move on.

TSLA has been a consistent profit maker as volatility has calmed down, for the most part, since it joined the ranks of the S&P 500.

My Original Strategy

TSLA – 7dte 10 delta Short Put Spread

Directional Assumption: Slightly Bearish, Neutral, Bullish

Setup:

Sell 1 Put at 10 delta

Buy 1 Put at 7 delta

Close: Buy Back the spread at a 90% Profit

Stop Loss: 3 times credit received (300%)

**Note: I typically open this trade 15-30 minutes before the close of the market on Fridays.

My Tweaked Strategy

TSLA – 7dte 10 delta Short Put Spread

Directional Assumption: Slightly Bearish, Neutral, Bullish

Setup:

Sell 1 Put at 16 delta

Buy 1 Put at 5 delta

Close: Buy Back the spread at a 90% Profit

Stop Loss: 2 times credit received (200%)

**Note: I typically open this trade 15-30 minutes before the close of the market on Fridays.

Conclusion

A quick study on my weekly TSLA trade. When I analyzed the historical data, it shows that I left a lot of money on the table. I am now going to trade a bit riskier on TSLA until it no longer works.

It will require 3 times more capital upfront to trade 16/5 delta than the 10/7 delta I was trading, but it also pays 3 times more premium.

This means I can open fewer contracts and still receive 20% more return on capital if TSLA continues down the same path. As you can see in the charts above, more risk also means a greater return on investment.