Shifting gears in the $TSLA #DayTrade

Back when I first posted A Simple Strategy For Day Trading Short Strangles on Stocks, I used TSLA as the example of how to day trade short strangles on the weekly options for a steady weekly and annual return.

TSLA was the best stock for making those daily short plays at the time although any volatile stock would work too. It probably is the best stock but I haven’t tracked it lately.

The point of the short strangles with the weekly options was to limit overnight risk and to limit intraday risk using a tight stop with a rewrite of the strangle if stopped out.

It was a strategy aimed at a 5% to 15% return per week, which could provide a great steady annual return.

I still recommend it because it works.

But it takes deep pockets to trade it because the margin requirement for trading those TSLA strikes naked took a relatively large account. I set the percentage returns based on a $20,000 margin but it could, depending on the brokerage, have a much higher requirement. At my brokerage during the year I tested and traded the strategy I had margin requirements, depending on the stock’s volatility during the week, as high at $36,000.

Not really a trade for the “little guys.”

So what to do?

Since I aim these posts at the “little guys,” meaning those trading $1000 in options and those trading $10,000 in stocks, I needed to do what I always do — shift gears to simplify and make…