The Brew Ep. 515 — Trader’s Workshop | Oct 21, 2026 — Tesla Earnings: Double Calendars vs. Double Diag Earnings season is Lex’s favourite time of year, and this Trader’s Workshop is mostly about one event: Tesla’s report after the close. But first, a quick look at how the season started. Bank earnings were mixed. Jason notes two things: credit card utilization is rising and defaults are starting to tick up, an early sign that consumers are feeling pressure, and Bank of America was hit with a large fine over anti-money-laundering controls. Mark explains that the issue reportedly came down to poorly calibrated models that let suspicious transactions through. The hosts also touch on news that Tesla and SpaceX have formed committees to explore a merger, which lifted both stocks before the open. Then Lex builds a Tesla trade in Tradier Pro. He starts with the at-the-money straddle, the 385 strike, priced at about $23.50. Adding and subtracting that from the strike gives an expected range of roughly 361 to 408.50. His preferred structure is a double calendar: sell the 410 call and the 360 put in the expiration right after earnings, where implied volatility is about 97%, and buy the same strikes a few days later, where it’s about 67%. The cost is about $1.07. He wants Tesla to move toward one of the short strikes without blowing through it, then take profit on that side and let the other side ride. He also shows a cheaper version: a double diagonal, buying the long options one strike further out. That cuts the cost to about 10–15 cents but adds $2.50 of risk from the difference between strikes. Lex likes it because, as Mark often says, options on big, well-known earnings names are priced efficiently, so the edge comes from structure rather than direction. Jason pushes back on the timing: one of the expirations is just one trading day apart, so volatility will collapse on both, and Tesla’s Wednesday expiry lands on the earnings day itself. He prefers short-Vega trades such as narrow butterflies near each end of the range, which realise gains faster without as much exposure to volatility. Lex prefers to place earnings trades late in the afternoon of the report day, once the day’s move is done. Mark rarely trades earnings at all. The episode closes with plans: PeakBot is ringing the opening bell at Cboe the following Wednesday, and TraderFest is planned for next May. Key takeaways: – Use the at-the-money straddle to set the expected range. – Double calendars sell expensive pre-earnings volatility and own cheaper volatility after. – Double diagonals cost less but add strike-width risk. – Watch expiry timing: one-day gaps can collapse both sides at once. Options involve risk. This episode is educational and not a recommendation. |
About Trader’s Workshop / The Brew
Trader’s Workshop is a recurring segment within The Brew on Tradier Hub where Lex, Mark, and Jason engage with audience questions and work through live market setups including major earnings events.
