Wiki Selling TSLA Options - Be the House

[vikings123]

BTC 6X 750 CCs 09/24 for a 5% loss as Tesla was showing tremendous strength. Might look to sell $765 CCs if we go on a run tomorrow.

Also BTC 15X 670/700 09/24 BPS for a 80% gain.

I have 10X 660/700 for Oct 1 that are up 30%. Also have a couple of 730 Oct 1 puts that are up 50%.

Game plan for Friday is to sell some Oct 1 puts and open a bunch of BPS if there is an MMD. Also looking to add to Jan 24 1200 LEAPS.

Upper BB is 772. If we break that level 800 is possible next week.

 

[vwman111]

You have ( pardon the pun) no margin for error. IRA with no cash, limits what you can do.
I agree with @MikeC Roll them out.

@mickificki

With no cash/margin, you will need to use the roll function or a multi leg function. You likely won't be able to buy back to close the short position to resell if they are ITM

 

[juanmedina]

I haven't sold covered call in the last two weeks, the premiums seem awful . I kind of feel like buying calls instead.

 

[InTheShadows]

Just looked at after hours. I am quite nervous about my sold calls now.

 

[ammulder]

Well, either the market makers have the juice or they don’t. As of this morning there were still plenty of calls at 750 and 760 to defend. I guess we’ll see what kind of volume we get, too. Might be a lot of people closing early if there’s any kind of morning dip, though, that’s for sure!

 

[phantasms]

Just looked at after hours. I am quite nervous about my sold calls now.

Same. I’ve got one at 760 and a few at 765 and 770.

There was a ton of volume on the 750 call today. Fingers crossed for a giant wall in the morning.

 

[buttershrimp]

A gap up in the morning to premarket at 758, opening at 762…. 21 million share volume and closing at 791.

Not to worry, there will be a pushdown Friday to 780. If you see a golden cross, don’t blink or say “Chanos” 3 times. You will get 4 years of diarrhea if you do that.

seriously though, my end of week estimate is 787. … this is based on hard research and serious serious hoping

 

[jeewee3000]

I haven't sold covered call in the last two weeks, the premiums seem awful . I kind of feel like buying calls instead.

Was looking at CC premiums every day this week and never felt comfortable pulling the trigger. Even yesterday with the rally to +$750.

I know I'm always too optimistic regarding the SP, but this is the first time in months that I feel a return to above $800 is imminent. (Let's say within the month)

Will I buy calls to bet on this? Heck no.

(I'm selling BPS though )

 

[FS_FRA]

I have not found a cc-trade this week I'm either comfortable with risk-wise, or happy with premium-wise. So I sit on the sidelines. Can't lose my shares, as I'd be killed by taxes (cost base too low) - maybe need to load up on LEAPS and write lcc instead, but "wheeling" an lcc doesn't work, right?

Now, what are these magical things you guys keep referring to as BPS?

Question @Drezil: German tax implications with BPS re: €20K limit for carrying forward losses apply? Premium for written put is taxed at 25%, loss on sold put is limited to €20K annually? (Gerne auch per PN)

 

[samppa]

I have not found a cc-trade this week I'm either comfortable with risk-wise, or happy with premium-wise. So I sit on the sidelines. Can't lose my shares, as I'd be killed by taxes (cost base too low) - maybe need to load up on LEAPS and write lcc instead, but "wheeling" an lcc doesn't work, right?

Now, what are these magical things you guys keep referring to as BPS?

Question @Drezil: German tax implications with BPS re: €20K limit for carrying forward losses apply? Premium for written put is taxed at 25%, loss on sold put is limited to €20K annually? (Gerne auch per PN)

Bull put spread, or put credit spread.
Basically sell a put out of the money and buy a put further out the money.

e.g. I have -p710/+p660 spreads open now that expire tomorrow.
I opened these on monday's dip for $6.50/spread, and each spread reserved about 5k of margin.

 

[phantasms]

I’m considering letting my 760 ride so I can open up the world of puts.

My n00b tactics would have me selling a 750 or 755 for next week as I figure worse case scenario is I get my precious shares back and made some money along the way. My last 100 shares have an average cost basis around 420ish. It seems you guys stay far away from the SP hoping to not get assigned the shares. I guess the only thing that could go wrong is the stock launches up and makes my cash less valuable from a put selling perspective.

While I’m extremely bullish on TSLA I’m a little “be fearful when others are greedy” on everything else.

Not sure exactly what I’m asking here but wanted to get this out there. Good luck everyone!

 

[UltradoomY]

I’m considering letting my 760 ride so I can open up the world of puts.

My n00b tactics would have me selling a 750 or 755 for next week as I figure worse case scenario is I get my precious shares back and made some money along the way. My last 100 shares have an average cost basis around 420ish. It seems you guys stay far away from the SP hoping to not get assigned the shares. I guess the only thing that could go wrong is the stock launches up and makes my cash less valuable from a put selling perspective.

While I’m extremely bullish on TSLA I’m a little “be fearful when others are greedy” on everything else.

Not sure exactly what I’m asking here but wanted to get this out there. Good luck everyone!

If you let the $760's go - why not sell a put at $760 for the following week? Or higher depending on the premium.
That way if the stock does keep going up - you can sell more and more aggressive puts and once assigned your cost basis will be lower.

 

[BornToFly]

I’m considering letting my 760 ride so I can open up the world of puts.

My n00b tactics would have me selling a 750 or 755 for next week as I figure worse case scenario is I get my precious shares back and made some money along the way. My last 100 shares have an average cost basis around 420ish. It seems you guys stay far away from the SP hoping to not get assigned the shares. I guess the only thing that could go wrong is the stock launches up and makes my cash less valuable from a put selling perspective.

While I’m extremely bullish on TSLA I’m a little “be fearful when others are greedy” on everything else.

Not sure exactly what I’m asking here but wanted to get this out there. Good luck everyone!

The problem you run into when selling Puts, with the thought of selling covered calls if the shares get assigned, is that the SP can drop so much that you get very little for the CCs. Example: You sell Puts for 720 and they get assigned as the stock drops to 680. You want to sell CC at 720 to make money on the new shares, but the SP has now dropped to 650. You think you will wait for the SP to recover to get more premium, but the SP drops to 600. Now selling CC at 720 gets you almost nothing in premium.... If you had done this with 800 strike Puts back in February, you would have gone 7 months with almost no income.

 

[phantasms]

The problem you run into when selling Puts, with the thought of selling covered calls if the shares get assigned, is that the SP can drop so much that you get very little for the CCs. Example: You sell Puts for 720 and they get assigned as the stock drops to 680. You want to sell CC at 720 to make money on the new shares, but the SP has now dropped to 650. You think you will wait for the SP to recover to get more premium, but the SP drops to 600. Now selling CC at 720 gets you almost nothing in premium.... If you had done this with 800 strike Puts back in February, you would have gone 7 months with almost no income.

Good point. However in this scenario I end up with my initial batch of shares which is what's most important to me. The income is just the icing on the cake to pay for Tesla products.

If you let the $760's go - why not sell a put at $760 for the following week? Or higher depending on the premium.
That way if the stock does keep going up - you can sell more and more aggressive puts and once assigned your cost basis will be lower.

True. No sense in lowering my strike price if I want the shares back anyway and bonus is bigger premiums.




I wonder if that 759.8 ceiling this morning means they'll attempt to defend 760. ¯\_(ツ)_/¯

 

[phantasms]

Ok. It looks like there's some effort going on here. lol

I bought back a few CCs at a mild loss. Still have a couple out there at 760 and 765 for the week. I figure if it jumps I'll roll the 765 and let the 760 go. [eeek]

 

[deerfield]

The problem you run into when selling Puts, with the thought of selling covered calls if the shares get assigned, is that the SP can drop so much that you get very little for the CCs. Example: You sell Puts for 720 and they get assigned as the stock drops to 680. You want to sell CC at 720 to make money on the new shares, but the SP has now dropped to 650. You think you will wait for the SP to recover to get more premium, but the SP drops to 600. Now selling CC at 720 gets you almost nothing in premium.... If you had done this with 800 strike Puts back in February, you would have gone 7 months with almost no income.

This is a safe play to not sell below your cost basis, but if you are willing to manage them a bit, you can always sell for closer to the share price. Keep rolling it along for whatever incremental strike price you can get. This gets you higher premium while waiting for the share price to come back. In your case for example, if it drops to 600, better to sell even at 700 vs 720. I've been doing this with my a set of shares I have at a $781 cost basis. Been rolling up and down since.

 

[BornToFly]

You can also run into the opposite problem. You sell CC for 750 and the shares get called away. In a taxable account, you just lost X% of your value to taxes. You try to sell Puts at 750 or even 760 to get your shares back. But the SP keeps climbing because we are at the start of the next bull run. You chase all the way to SP of 1200, making some money along the way with your Puts sales, but nothing like you would have made on your shares if they hadn't been called away in the first place. This is why I sell Puts and Calls that are "safe" and generate less premium. I have to roll less often and avoid big losses. I see my brother starting to make the mistakes I made 5 years ago. He has starting selling Puts at a time when the SP has been stable and has now slowly started climbing. He's thinking this is great! This is easy! Free money! He has now sold so many that he had to buy way OTM Puts to increase his margin, and the SP hasn't even dropped 20% yet like it can for NO reason! Needless to say, I gave him a bit of a lecture last night when I found out what he was doing....

 

[phantasms]

You can also run into the opposite problem. You sell CC for 750 and the shares get called away. In a taxable account, you just lost X% of your value to taxes. You try to sell Puts at 750 or even 760 to get your shares back. But the SP keeps climbing because we are at the start of the next bull run. You chase all the way to SP of 1200, making some money along the way with your Puts sales, but nothing like you would have made on your shares if they hadn't been called away in the first place. This is why I sell Puts and Calls that are "safe" and generate less premium. I have to roll less often and avoid big losses. I see my brother starting to make the mistakes I made 5 years ago. He has starting selling Puts at a time when the SP has been stable and has now slowly started climbing. He's thinking this is great! This is easy! Free money! He has now sold so many that he had to buy way OTM Puts to increase his margin, and the SP hasn't even dropped 20% yet like it can for NO reason! Needless to say, I gave him a bit of a lecture last night when I found out what he was doing....

Much appreciated. This is exactly what my only concern is. I think I need to do a better job of listening to myself. Normally I'm extremely conservative and careful with my strike prices. This week I broke two rules. First rule I broke was don't sell covered calls after a big dip. Looking back, generally, when TSLA jumps up a lot it's because it went down a lot previously. Of course I'm ignoring the mega-run last year. Secondly I felt this week would be very strong and intended to hold off on selling any. I did sit on my hands Monday and Tuesday which was a first for me. But, as the week played out, by Wednesday I figured I could safely sell some behind some call walls. I'm quickly learning not all call walls are created equal.

I'm thinking I'll write on a piece of paper "rules for next week" and do my best to pay attention to my previously unemotional self.

 

[phantasms]

Are people reading the price action today as 760 is well defended and "what me worry" or as get out now before the 10:30 pop. lol

 

[corduroy]

STO 10x BPS Oct 1 570/670 $3 Nice little put premium jump this morning.