A Robinhood trader says he made a 1,300% return from Tesla's stock rally. Here's how he did it.
The trader, who goes by "Kronos_415" on Reddit, netted the 26-fold return in under a month. He told Business Insider that he's a 28-year old business analyst who lives in Washington DC and began investing six months ago. He declined to share his name.
The amateur investor first bought Tesla options on Robinhood's stock-trading app on January 3. He made the decision after reading a slew of good news about the company, including the opening of its new gigafactory in Shanghai and the first deliveries of its Model 3 cars in China. The electric-car maker's stock surged more than 50% last month, from about $430 to $650. As a result, Kronos_415 was able to turn his "meager" $5,000 into $51,000, he said.
Next, he spent nearly $27,500 of his earnings on seven Tesla calls on February 3. Each of the options granted him the right to buy the stock at $700 until February 21. After the stock surged, he sold each call — worth $3,925 when he bought them — for $17,025 each, more than quadrupling his money.
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