earningsseason
Tesla reports its third-quarter results after the U.S. market closes on Wednesday, October 21. Most pre-earnings analysis debates EPS. The more useful question is how much movement the market is pricing in. (start)
The numbers behind the reaction:
Tesla’s typical post-earnings reaction is around 4.5%, but the average is approximately 7.8%, driven by two very large moves. (start)
Options are pricing in something close to the higher figure. (start)
Deliveries are already known: 486,532 vehicles, announced on October 2. So tonight’s surprise will have to come from margins and guidance, not volume. (start)
Why this matters for risk:
A jump after the market closes can exceed a normal stop-loss, so your exit price may differ from the level you set.
A position sized for a 4% move may be too large for an 8% move.
Two large outliers pushed up the average, which means tail risk is real, not theoretical.
Three ways to approach it:
Trade the news: accept the jump and keep your position small enough to withstand moves in either direction.
Trade the reaction: wait for the first session after the report and let the direction reveal itself.
Don’t trade: avoid the event and re-enter once the conference call has provided guidance on margins and capital expenditure.
Your turn: which of the three options would you choose for tonight, and what position size would you consider too large for an 8% jump? Share your reasoning in the comments.
$TSLAB
Tesla reports its third-quarter results after the U.S. market closes on Wednesday, October 21. Most pre-earnings analysis debates EPS. The more useful question is how much movement the market is pricing in. (start)
The numbers behind the reaction:
Tesla’s typical post-earnings reaction is around 4.5%, but the average is approximately 7.8%, driven by two very large moves. (start)
Options are pricing in something close to the higher figure. (start)
Deliveries are already known: 486,532 vehicles, announced on October 2. So tonight’s surprise will have to come from margins and guidance, not volume. (start)
Why this matters for risk:
A jump after the market closes can exceed a normal stop-loss, so your exit price may differ from the level you set.
A position sized for a 4% move may be too large for an 8% move.
Two large outliers pushed up the average, which means tail risk is real, not theoretical.
Three ways to approach it:
Trade the news: accept the jump and keep your position small enough to withstand moves in either direction.
Trade the reaction: wait for the first session after the report and let the direction reveal itself.
Don’t trade: avoid the event and re-enter once the conference call has provided guidance on margins and capital expenditure.
Your turn: which of the three options would you choose for tonight, and what position size would you consider too large for an 8% jump? Share your reasoning in the comments.
$TSLAB