TSLA has also been 'resting' and building support just above the 20-day EMA. Taking advantage of the quite lofty implied volatility levels, we could add a bull put to the existing bear call spread, thereby creating an Iron Condor.
The broker will not require extra capital be held to add this trade to the existing bear call. Since by definition, the stock cannot finish at two places upon expiration in June. Therefore, we can cut the trade's risk down by adding another spread trade to the existing trade.
We could consider adding a June $85.00/$87.50 bull put spread for $0.20/share.
Max Reward will be $0.20/share, while the risk in this side of the trade specifically would be $2.30/share. This would create a 8.69% Return on Risk in only one week. Not too bad.
Target Exit Point: Allow both options to expire worthless.
Contingency Exit Plan: Look to exit or adjust the trade if the stock closes beneath the 20-day EMA (or $90 for more aggressive traders).
Again, this is for educational purposes only via a paper trading account. For more details visit us at "markettamer"