Wiki Selling TSLA Options - Be the House

[tivoboy]

Interesting to look for analogy, but rebalancing plays a roll, so depending on if "they are ready rebalancing"there could be another sell-round today. These are big players, that do not trade outside regular trading hours (because of the volumes, they would ruin it for themselves and leave everybody in doubt @opening) SO what we see now pre-market is retail "buying the dip" so I sold a bit again, expecting at least 1 dip today, maybe not into the close, but yesterdays sell-off brought Max Pain to 250, so that's not in favor either. Maybe we get a bottom around 243 or even fill the 235 gap and when rebalancing is over and done with a run back up, so be careful today. I guess rebalancing is not over, because it had such an impact yesterday they stopped or had a plan to spread including today, I dit not check all of the bigger trades but I count at least 7 huge 5-minute selloff candles, the last one at close. We are not yet oversold on the daily at all, so there is room for a lower bottom. Never catch a falling knife!

Macro and overall market is always going to impact nearly every stock, but in this current case I think this IS a Tesla issue. From Weds high ~298 to yesterday low, we dropped about 12.5%, 14% is about where it lands fairly frequently when we‘re going to have a pull back.

Most large cap mega stocks that are being re-balanced in the NSDQ, did have a pull back from Tuesdays highs (I sold a lot a calls while on a flight btw, thank you United WIFI for working ONCE). Those ‘other’ stocks are within about 2-4% of their most recent (and for many ATH) highs, and I think after we get through this re-balancing they might well pull up again through EOM. I’m positioned for a more significant pull back over the next 60 days, and will buy calls for Dec/Feb24 once that happens.

I think the challenge for TSLA at this point is, the overall market AND Tesla narrative going into Q3 is LESS favorable, and a further continuation to various technical levels is probably going to play out.

 

[SpeedyEddy]

Macro and overall market is always going to impact nearly every stock, but in this current case I think this IS a Tesla issue. From Weds high ~298 to yesterday low, we dropped about 12.5%, 14% is about where it lands fairly frequently when we‘re going to have a pull back.

Most large cap mega stocks that are being re-balanced in the NSDQ, did have a pull back from Tuesdays highs (I sold a lot a calls while on a flight btw, thank you United WIFI for working ONCE). Those ‘other’ stocks are within about 2-4% of their most recent (and for many ATH) highs, and I think after we get through this re-balancing they might well pull up again through EOM. I’m positioned for a more significant pull back over the next 60 days, and will buy calls for Dec/Feb24 once that happens.

I think the challenge for TSLA at this point is, the overall market AND Tesla narrative going into Q3 is LESS favorable, and a further continuation to various technical levels is probably going to play out.

Then you maybe haven't noticed earlier that mayor moves in the nasdaq can be procentually be doubled for $TSLA, so Nasdaq -2% -> TSLA -4% (which was yesterday exaggerated because of doubling down due to rebalancing. Of course Elon has to stay away from earning calls if you find share price short term important (as most option traders do of course)

 

[SpeedyEddy]

Next thin line of mine reached, and breached with power (259.92) which could have saved the day, but I am not at all at ease. Earlier today bought 10 247.5 puts for today @ $0.10 just for fun, put for sale @ different levels, which would in total bring a profit of 3800% if all of them would be triggered.. (in which case only +P and -C holders in this thread would be happy, sorry)
Share count + 8 (some you win, some you loose, really nervous market today, as I expected and told you. Daytrading with lots of shares is hard work, but worthwhile on days like this)

 

[tivoboy]

Then you maybe haven't noticed earlier that mayor moves in the nasdaq can be procentually be doubled for $TSLA, so Nasdaq -2% -> TSLA -4% (which was yesterday exaggerated because of doubling down due to rebalancing. Of course Elon has to stay away from earning calls if you find share price short term important (as most option traders do of course)

Indeed I have (and if I hadn’t I really probably shouldn’t be trading options), it’s historically ~ 2.4x, but call premiums evaporated prior to ppl focussing on re-balancing IMHO.. as well the delta change for Tesla is one of the LOWEST of all the big tech high cap stocks, so even though its a higher beta to other tech stocks, overall it should be lower not higher.

hard to tell with one of the most manipulated stocks in the market, but at least we can predict and make money on it. Good week.

 

[dl003]

It's hilarious how the same cycle is being repeated time after time: TSLA posts stellar P&D -> Stock goes up -> Elon says things are turbulent; FSD is vital -> "oh no they're gonna botch the next Q" -> stock goes down -> next Q P&D beats again -> ???

 

[Max Plaid]

Bought back today's 24c -c270's early along with 3x Oct -c200's, thinking we'd get some kind of pop and to sell 27x more 7/28 -c270's, but the price action went against me and give Max Pain is now @255, I wasn't hopeful for a recovery today

So I went for something different and used these contracts, along with the dip to roll 46x Dec -c300 to 73x Oct -c300, took some realised gains out of the Dec 300's and net +$1 on each contract

My rationale, two months earlier mean means more likely to expire and possibility to roll to higher strike before end of the year...

84x -c200 remaining...

 

[elasalle]

It's hilarious how the same cycle is being repeated time after time: TSLA posts stellar P&D -> Stock goes up -> Elon says things are turbulent; FSD is vital -> "oh no they're gonna botch the next Q" -> stock goes down -> next Q P&D beats again -> ???

atleast we know Elon has no intent to sell his shares

be greedy when Elon says negative stuff, be fearful when Elon says super positive stuff !!

 

[ReddyLeaf]

Anyone looking for a clue as to how today could play out may want to have a look at what happened after the Q1 earnings report. So far things have played out in an eerily similar way - You would almost think it's planned that way

That was a similar situation with earnings meeting expectations (even better for Q2) but margins disappointing and the threat of price cuts over-shaddowing the actual performance. Unfortunately we traded mostly sideways for nearly a month after Q1 ER before embarking on the most recent upwards run.

Thanks for the reminder. In case anyone wondered what the target might be: How about $260, with 46,000 contracts for August 18th. Straddle @Max Plaid ?

Edit: I’m got really destroyed this week. Closed BCS before earnings at a high, left the profitable BPS to go ITM and forced to roll after the SP dump. The only thing I did well was day trade some 8/18 CCs (STO, BTC for about $2 profit). Also, sold 0DTE -c265 today for $0.80, which might expire worthless. At least my -CC LEAPS are way down. Will work to buyback some more on 8/18.

Edit 2: and of course, the SP jumps after I sold the -c265s

 

[Max Plaid]

Thanks for the reminder. In case anyone wondered what the target might be: How about $260, with 46,000 contracts for August 18th. Straddle @Max Plaid ?

Edit: I’m got really destroyed this week. Closed BCS before earnings at a high, left the profitable BPS to go ITM and forced to roll after the SP dump. The only thing I did well was day trade some 8/18 CCs (STO, BTC for about $2 profit). Also, sold 0DTE -c265 today for $0.80, which might expire worthless. At least my -CC LEAPS are way down. Will work to buyback some more on 8/18.

Edit 2: and of course, the SP jumps after I sold the -c265s

View attachment 958353

I have -270 straddles for 7/28, hoping we move into an upward trend again and I can rely more on -puts...

Edit: didn't expect that recovery today (although plenty of time for it to go back below 260), but it's welcome...

 

[intelligator]

I don't see how we can roll back up in the weel ahead. -c290 are about $1.17 @ SP 266... seems a stretch to get there given all the doubt about Q3. Looking to STO today, adjust, roll as needed. Some I'd let get called away to clean up margin. Anyone see that being too close to the sun?

 

[ReddyLeaf]

I don't see how we can roll back up in the weel ahead. -c290 are about $1.17 @ SP 266... seems a stretch to get there given all the doubt about Q3. Looking to STO today, adjust, roll as needed. Some I'd let get called away to clean up margin. Anyone see that being too close to the sun?

Use me as an inverse indicator. I’ll roll my 7/21 -c265s to 7/27 -c270s if the SP doesn’t drop back below $264 soon.

Edit: saw that it’s in the $263s so ignore me. I’m just still mad at my trading this week.

 

[Max Plaid]

All hail "them"!

Is that the rebalancing done at the closing cross then? Looks like the mega caps got traded massively at the end - Nvidia 23M shares out of 79M for the day, that's crazy... Google 29M / 73M... etc

 

[tivoboy]

All hail "them"!

Is that the rebalancing done at the closing cross then? Looks like the mega caps got traded massively at the end - Nvidia 23M shares out of 79M for the day, that's crazy... Google 29M / 73M... etc

Yes, funds were required to buy on the close (if not prior) to be active on monday.

update: you gotta look at the overall closing numbers today, essentially UNCH at end of day.. that is incredible.. all the movements, all the underlying moving around massively, UNCH

 

[Jim Holder]

@dl003 Your original plan posted several days ago seems to be playing out:

•Net long delta to $296; close positions and observe.

•If we break $296, then net long delta to $340.

•If rejected at $296, wait for a retest of $230-$217.

•If $217 holds, then net long delta for another test of the resistance trend line later this year; know that the subsequent correction will reach $217 minimum.

•If $217 doesn't hold, then be defensive until we've bottomed out.

•At next attempt at $340 lighten up position at $340 and prepare for the pullback to end at $270, then at $270 net long delta up further to $380.

•At $380, close all long positions.

 

[SpeedyEddy]

As the close was stil above my thin line @ 259.92 I still have hope we trade (a juicy bit) higher on Monday. Tesla will mostly follow macro again (x2) from Monday, I must assume. The biggest earningsweek will lead that way, maybe causing some retail running into Tesla that has a decent revenue and again is on a discount. I will bet on nothing else than daily move and stay away from selling very close options until the next move is clear. At least the close near a former resistance/support makes it rather easy to detect the next move. To 235 (which would make it clear that a real bottom is more likely to follow ) or back to 276.50 which would leave us wondering what to expect next.

 

[SpeedyEddy]

Daytrading with lots of shares is hard work, but worthwhile on days like this)

I talk a lot about daytrading shares, which of course is not advisable in a lot of countries because of tax-laws. In Holland (when trading privately) there is a virtual-profit-rule that lets you pay for a fixed profit and the base is your capital on Jan 1st.

 

[Max Plaid]

I talk a lot about daytrading shares, which of course is not advisable in a lot of countries because of tax-laws. In Holland (when trading privately) there is a virtual-profit-rule that lets you pay for a fixed profit and the base is your capital on Jan 1st.

Not feasible in Belgium as losses on shares are not deductible... losses on options trades are... very, very stupid rule, like many Belgian taxes

 

[Chenkers]

I talk a lot about daytrading shares, which of course is not advisable in a lot of countries because of tax-laws. In Holland (when trading privately) there is a virtual-profit-rule that lets you pay for a fixed profit and the base is your capital on Jan 1st.

In the last couple of months I've been mainly day trading shares (no real LT CGT or tax issues). I've put a lot of time and effort into learning price action, risk management, entries/exits and have a deep understanding of how TSLA trades. And while a times it's been more profitable than selling options. Over a longer time period it's proven to be a net negative for me with losses particularly from the volatility of this last week being an eye opener. The pshychology involved in day trading (shares or options) is radically different to what this thread focusses on and is imho the single biggest challenge.

So I think I'll happily go back to the more slow and steady approach of mostly selling weekly options. Doing what I know best and am most suited to but with a bit more risk management built in. I'll probably still do the odd day or swing trade but only when it's a AAA setup.

 

[BornToFly]

I think this coming week it's going to be mainly about Macro and the Fed Meeting. We could see a fairly significant pull back if they raise rates again.

 

[tivoboy]

I think this coming week it's going to be mainly about Macro and the Fed Meeting. We could see a fairly significant pull back if they raise rates again.

Pretty much 100% we’ll see a 25 bps hike, don’t count on narrative saying anything like “we think this is enough, or we think we going to let it all ride a bit into the fall”..

I don’t see any of that pressing a further pull back, but I DO see a further pull back across the board in TSLA and much of TECH and have positioned for it With downside puts and a lot of covered call sales early last week.