Tesla (TSLA) has been an absolute roller coaster this week, and Thursday was no exception, to say the least…
The stock dumped more than 14% during the session, driven largely by headline drama between Donald Trump and Elon Musk. Whether that’s rational or not is beside the point — this market remains incredibly emotional, and Tesla is one of the most emotional stocks out there, shedding $152 billion from its market cap amid the spat.
So the question is, how am I managing my own large TSLA position through all this? Let me walk you through it.
Using Collars, Covered Calls and Long Puts to Stay in Control
I currently own 600 shares of Tesla — a position I’ve been comfortable with through all the recent volatility. On Thursday, I already had a collar trade in place, with covered calls at the 277.50 and 310 strikes, and long puts extending out to July 18 at the 100 strike as protection.
That put was way out of the money, but if this sell-off continues (the stock is up nicely today, though), that trade could turn a small cost into a couple bucks of profit, further lowering my cost basis. Things like this are exactly why it’s a good idea to buy out-of-the-money protection!
The covered calls, on the other hand, were working well. Those positions were up about $6,400 on the day after starting up roughly $3,000. With just eight days left to expiration, I was looking to extract as much premium as possible from those trades.
As for the puts, while they hadn’t paid in a big way yet since they’re so far out of the money, they provided protection if the selling really accelerated. That’s the whole point of the collar — you can stay in the core position but keep risk defined in case the market decides to really punish the stock.
Things are bouncing back so far today, but if things get heated again, it could come right back down.
Trading Around the Position Without Getting Emotional
One of the key things I emphasized was not trading emotionally in this environment. The market is already driven by emotion right now — especially when it comes to Tesla — so adding more emotion to your own trades is a fast way to get wrecked.
For me, it’s about managing the trade and letting the structure do its job. I’m not chasing puts or panicking out of the shares. I’m working the covered calls and monitoring the long puts.
I’ll take profit where it makes sense and roll if needed, but the core strategy remains the same.
Bottom line — I still like Tesla long term. It’s just a lot of drama and a lot of volatility right now. That’s why I’m positioned the way I am, so I can ride through it and stay in control.
I’ll see you in the markets.
Chris Pulver
Chris Pulver Trading
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*This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk.
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