How I Made USD5446 This Month By Trading Tesla Stock (Not By Shorting Or Buying PUT)

Feburary is another volatile month for the stock market. It started with a rally during the Chinese New Year period and when things are recovering, the worse than expected CPI data, alongside statements from Fed officials start to incite more fears in the market again. Then, the uncertainties of the Ukraine war also spook the market further.

I have previously shared in this article on my trading strategies for bullish, bearish and volatile markets:
How Not To Lose Money In Trading? | My Trading Strategies For Bullish, Bearish And Volatile Market

So, in this article, I would like to share with you how I use my strategy for trading in volatile market to earn USD5446 this month.

On 3 Feb 22, my previous Tesla PUT contract of Strike Price (SP) $1,200 was exercised before expiration date of 4th Feb 22. So, I sold a short covered call contract and collected a premium of USD960.

On the following week, 7th Feb, I sold a new covered call contract, with SP $1,100 which was above my average price of $1,080. However, just 2 days later on 9th Feb, a drop in IV meamt that I could buy to close the contract and earn a profit of USD538.

I sold a new OTM covered call contract on 9th Feb 22 and again closed it on 14th Feb 22, when the share price of Tesla dropped, to earn a profit of USD918. On the same day, I opened up another covered call contract and closed it just 3 days later, to earn a profit of USD350.

I kept repeating the same strategy for the next 3 trades on 17 Feb, 22 Feb and 23 Feb and my total profits secured for Feb was USD3,946. Together with the premium that I collected for the covered call contract that I sold on 24th Feb 22, where I received a premium of USD1.5k (SP $915, expiry date 1 April 22), my total premium collected for Feb adds up to USD5446.

So, if I do not roll the contract further and Tesla’s share price remained lower than USD915 by 1 April 22, my returns for the months of Febuary and March would be

5,446/ 108,000 = 5%

which averages out to 2.5% per month.

If Tesla’s share continues to fall or if the premium of the contract falls again before FOMC meeting in March, I will continue to the same strategy to earn more premium. If Tesla’s share price spike up more than the 20% buffer that I set aside for my OTM covered call, then I may close the contract at a loss. If it is within the 20% buffer, then I will still earn from the contract as it expires worthless.

I hope this sharing gives you some perspective on how to trade using a simple method to keep earning some income/ returns during these volatile times.

Keen to learn about options trading but do not wish to pay for expensive courses, this newbie guide will help gain the knowledge and fundamentals to understand options better. And it’s totally free!
The Newbie’s Guide To Options Trading

The LEAPS Strategy has helped me make more than USD120,000 in 2021. Here’s all you need to know about this strategy that can help you increase your wealth exponentially:
The Ultimate LEAPS Options Thread

Looking for ideas on what stocks to invest in or which stocks to trade? You can take reference from what I have been buying or selling. I try to update them as soon as I can in this section, as well as share my thoughts behind executing these trades:

Excited to start your trading journey or perhaps try out with a paper trading account to build your confidence in trading? Check out this step-by-step to help you get started:
How To Buy Options on Interactive Brokers (Step-By-Step)

If the bear market in 2022 is making feel depressed as your stocks come tumbling down, read this article to find out how you can use options trading to help you claw back some of your losses as you await market recovery:
How I Do Earn Even When The Stock Market Is Bearish?

I watched tons of videos on YouTube since 2020 and if you are wondering if there are any useful channels that you can subscribe to for learning market trends, TA, FA, check out this compilation here:
My Secret Weapons For Options Trading: I Watch These YouTube Financial Channels Every Day

I concluded my first year of options trading with more than USD160k of gain, see how I do it and the capital I use for every month to give you a sensing of the percentage yield I get out of my gains:
1st Year Options Trading Recap: The Journey Towards SGD$217,509 Profits In 2021

This blog is as authentic and as transparent as I can share, I do not just show the wins and hide the loss. I have made some very bad decisions in the first 8 years of investing and paid a huge price for them. Here is the loss I have accumulated during these years. I hope you learn some lessons from my mistakes.
I Cut $135,715 Worth Of Losses In The Last 1.5 Months

Want to learn more about Technical Analysis (TA) but find it difficult to grasp the concepts? This article brings you TA at a glance, and helps you understand key terminologies, indicators, and techniques used in TA to equip you with the knowledge that can empower you in your investing/ trading journey.
The Newbie Guide To Technical Analysis (TA)

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