The (seemingly) inevitable march upwards makes selling options, and especially calls, the wrong strategy (in case anybody isn't clear on that) to take best advantage of that constantly rising share price. Nonetheless it fits with what I'm trying to accomplish.
Though I do believe the bias is heavily upwards, my success at picking direction, magnitude, and timing for buying options is bad. If I believed strongly enough in the upwards move, then the better choice would be buying calls (open ended gains as the shares go up) over selling puts (defined gains as the shares go up). Because of how buying calls has gone, I'm more comfortable selling these aggressive puts over buying calls. I mention this to make it clear - as a general proposition, buying calls is a better money maker with a constant up move in the shares (I choose for my own reasons, mentioned above, not to do that).
Positions changes:
On the put side, after selling Sep 4 1900 strike puts yesterday, I closed those this morning for a ~50% profit and sold new Sep 4 2100 strike puts (.30 delta). My thinking is two sided. 1) if the shares keep marching upwards, then I now have a ~$60 option on a short (7 trading days) leash that will decay rapidly (thus generating absolute returns faster than the old option I closed). 2) If the shares reverse, then I'll be happy on the call side, and I'm ready to roll these down to lower strikes as needed. The puts are already ahead $8 while I've been writing this post.
On the call side, I decided to go ahead and roll the Sep 2200s to Oct 2400s, collecting a net credit of ~$20. The alternative I considered was the Oct 2450 strike which I could have reached with a ~$2 net credit. I can readily imagine that being the better choice
That $20 net credit arises from buying to close those calls at $176 while selling to open at $195. That means I've realized a loss of ~$146 on the options I closed and created a new position at the $195 premium. For how I'm tracking, that's going to make August look bad (though I also net increased my cash balance). And it's probably not going to be until at least the Oct monthly is close or at expiration before this position will resolve.
I had originally planned to wait until $2250 share price, but the shares are moving so far, so fast, and the 2200s are already ITM, I decided to proceed now. As best I can tell, from about $50 OTM to $50 ITM, the roll options yielded roughly the same outcomes - a $15 net credit and a $200 increase in the strike. I think it's better to think of that as ~2% OTM to 2% ITM. This is the window I'm working with right now as yielding the best rolls, given that the strike I'm rolling to is at most 2 months out. If I need to roll again really soon, then I might need to roll 2 months instead of 1 to get a large increase in strike along with a net credit.
I have some Sep 2300s as well which I expect I'll need to roll soon as well, though I'm waiting for now to provide additional time to collect the time value and waiting for a regression / pause that refreshes / drop in the shares.
Bigger picture, selling the shares at $3000 with the credits I'm collecting along the way is a good outcome for me. That'll represent locking in gains that are life changing for my family, so steadily rolling up to the $3000 strike and then being called away is a good thing (as is selling the options along the way and finishing OTM). Oh - and at that strike ($2700 actually), that'll make my original purchase of TSLA into my first AND second 10-bagger; that doesn't actually mean anything tangible, but I think it's cool!
Though I do believe the bias is heavily upwards, my success at picking direction, magnitude, and timing for buying options is bad. If I believed strongly enough in the upwards move, then the better choice would be buying calls (open ended gains as the shares go up) over selling puts (defined gains as the shares go up). Because of how buying calls has gone, I'm more comfortable selling these aggressive puts over buying calls. I mention this to make it clear - as a general proposition, buying calls is a better money maker with a constant up move in the shares (I choose for my own reasons, mentioned above, not to do that).
Positions changes:
On the put side, after selling Sep 4 1900 strike puts yesterday, I closed those this morning for a ~50% profit and sold new Sep 4 2100 strike puts (.30 delta). My thinking is two sided. 1) if the shares keep marching upwards, then I now have a ~$60 option on a short (7 trading days) leash that will decay rapidly (thus generating absolute returns faster than the old option I closed). 2) If the shares reverse, then I'll be happy on the call side, and I'm ready to roll these down to lower strikes as needed. The puts are already ahead $8 while I've been writing this post.
On the call side, I decided to go ahead and roll the Sep 2200s to Oct 2400s, collecting a net credit of ~$20. The alternative I considered was the Oct 2450 strike which I could have reached with a ~$2 net credit. I can readily imagine that being the better choice
That $20 net credit arises from buying to close those calls at $176 while selling to open at $195. That means I've realized a loss of ~$146 on the options I closed and created a new position at the $195 premium. For how I'm tracking, that's going to make August look bad (though I also net increased my cash balance). And it's probably not going to be until at least the Oct monthly is close or at expiration before this position will resolve.
I had originally planned to wait until $2250 share price, but the shares are moving so far, so fast, and the 2200s are already ITM, I decided to proceed now. As best I can tell, from about $50 OTM to $50 ITM, the roll options yielded roughly the same outcomes - a $15 net credit and a $200 increase in the strike. I think it's better to think of that as ~2% OTM to 2% ITM. This is the window I'm working with right now as yielding the best rolls, given that the strike I'm rolling to is at most 2 months out. If I need to roll again really soon, then I might need to roll 2 months instead of 1 to get a large increase in strike along with a net credit.
I have some Sep 2300s as well which I expect I'll need to roll soon as well, though I'm waiting for now to provide additional time to collect the time value and waiting for a regression / pause that refreshes / drop in the shares.
Bigger picture, selling the shares at $3000 with the credits I'm collecting along the way is a good outcome for me. That'll represent locking in gains that are life changing for my family, so steadily rolling up to the $3000 strike and then being called away is a good thing (as is selling the options along the way and finishing OTM). Oh - and at that strike ($2700 actually), that'll make my original purchase of TSLA into my first AND second 10-bagger; that doesn't actually mean anything tangible, but I think it's cool!
