Wiki Selling TSLA Options - Be the House

[BornToFly]

From the other thread. Shorting at ATH.

Edit: But others responded that it isn't in term's of percent.

Tesla, TSLA & the Investment World: the Perpetual Investors' Roundtable

Well, that chart only goes back to 2021. Let's see the Short Volume for 2019Q1 (logistics hell) and 2020Q2 (SEC 2nd Act). That would be more comparable. Cheers! Data only goes back to 8/2018, but it's still at ATH. https://www.tradingview.com/x/COaUF1iQ/

teslamotorsclub.com

 

[BornToFly]

Delta Question.

Main goal is not loosing the cash value of the account.

Assume 10,000 shares at 205. If I sell 100X Jan 2024 CC with 206.67 strike (Delta .66), and use the money to buy 100X Jan 2024 Protective Puts with 206.67 strike (Delta -.35) -

Will the cash value of the account stay constant if the SP drops to 150 (shares lost ~25%)?
(I know it will also block an increase in value with SP rise, but that is not the concern anymore).

Thanks.

 

[mongo]

Delta Question.

Main goal is not loosing the cash value of the account.

Assume 10,000 shares at 205. If I sell 100X Jan 2024 CC with 206.67 strike (Delta .66), and use the money to buy 100X Jan 2024 Protective Puts with 206.67 strike (Delta -.35) -

Will the cash value of the account stay constant if the SP drops to 150 (shares lost ~25%)?
(I know it will also block an increase in value with SP rise, but that is not the concern anymore).

Thanks.

Non advice:

I think this is your senario:TSLA 2 Legs calculator
The option setup locks your effective share sell price at 206.67, same as selling the shares, but with delayed tax implications. Plus $110k in premium based on Friday prices.

 

[Max Plaid]

From the other thread. Shorting at ATH.

Edit: But others responded that it isn't in term's of percent.

Tesla, TSLA & the Investment World: the Perpetual Investors' Roundtable

Well, that chart only goes back to 2021. Let's see the Short Volume for 2019Q1 (logistics hell) and 2020Q2 (SEC 2nd Act). That would be more comparable. Cheers! Data only goes back to 8/2018, but it's still at ATH. https://www.tradingview.com/x/COaUF1iQ/

teslamotorsclub.com

%age is less than in the old days, but perhaps the $$$ value is higher

Makes sense that this is the case, I honestly don't think it has been longs bailing-out the last two weeks

I'm looking to get out of my short calls before ER with some good profits, then just sell weekly shitcalls against my shares, seems the best strategy from here...

 

[ReddyLeaf]

Careful out there folks. There’s a large number of puts being traded on AAPL recently. When this has happened to TSLA, it usually means a drop is coming. I think the hedgies are targeting the market (don’t fight the FED) and it’s likely that TSLA’s 2-yr low ($182) is in their sights. I’m really contemplating BUYING some puts to protect my 11/11 -p240s. Damn crazy.

Edit: MaxPain is about $253 for the next few weeks, so I really expect a SP bump on Monday, hopefully a nice big one. If things were “normal”, I wouldn’t be selling CCs below $270.

 

[Yoona]

I'm looking to get out of my short calls before ER with some good profits, then just sell weekly shitcalls against my shares, seems the best strategy from here...

i agree, even if extrinsic profit turns out to be low

i may try this aggressive DITM CC coz i think it's:

• the fastest way to get rid of my temp BW garbage shares with high cost basis (279)
• the best way to prevent "holding the bag" when sp falls further

i am doozy from missing my nap, i dunno if that makes sense

you can also double-dip, but i think it's better done on a non-earnings week:

Covered Call Writing With A Twist: Selling 2 Calls Per 100 Shares | The Blue Collar Investor

www.thebluecollarinvestor.com

something else to think about - combine DITM CC with LONG Straddle:

"Combining Covered Call with Straddle?" by OptionTradingpedia.com Answers

www.optiontradingpedia.com

 

[OrthoSurg]

Sure, I think it's wise to always prepare and guard against the worst-case scenario, but on the other hand, look like WS has already priced-in a lot of "miss" the last two weeks... who knows?

I'm shifting to a very low-risk approach for the moment

Well, I’d say out of rationality that the Delivery miss emotionally punished by Wallstreet dropping the stock does price in a earnings miss.

If there is a earnings beat I would rationally expect a little bump in the stock. Temporary probably until the SPY completes its 5th Elliot Wave but I don’t see the stock dropping another -8% if the earnings are not an outstanding beat.

I feel like we are approaching the bottom because I feel like shorting the market and when retails feels like shorting, we’ll, it’s obvious the opposite happens.

I got pretty much convinced we are going to 180/185 and changed my final buy order from 200 to 185 however I don’t expect 140 unless, well, nukes fly everywhere.

 

[wnorris]

Well, I’d say out of rationality that the Delivery miss emotionally punished by Wallstreet dropping the stock does price in a earnings miss.

If there is a earnings beat I would rationally expect a little bump in the stock. Temporary probably until the SPY completes its 5th Elliot Wave but I don’t see the stock dropping another -8% if the earnings are not an outstanding beat.

I feel like we are approaching the bottom because I feel like shorting the market and when retails feels like shorting, we’ll, it’s obvious the opposite happens.

I got pretty much convinced we are going to 180/185 and changed my final buy order from 200 to 185 however I don’t expect 140 unless, well, nukes fly everywhere.

Numbers for Q3 are likely to beat, but what matters will be how Tesla answers the China demand question for Q4 and 2023. We need a solid answer from Zach on that question to provide relief from the current demand decline narrative. Perhaps as important, we need Elon to behave on the call. I worry he will go on an interest rate rant and create concern about '23.

This is the first time I may buy protective puts just to cover any tail risks. Normally it would not be an issue as I thought I was conservative enough to not need to worry, but too many wild cards as we are at all time lows. If I do buy puts I know this thing will rally hard.

 

[corduroy]

I'm trying to find a positive spin on all this. My account is now 55% cash, 45% TSLA. Not because I am adding a lot of cash, but because the TSLA is down so much. I am holding that cash for dear life right now. It's the best performing position in my portfolio this year.

 

[OrthoSurg]

I'm trying to find a positive spin on all this. My account is now 55% cash, 45% TSLA. Not because I am adding a lot of cash, but because the TSLA is down so much. I am holding that cash for dear life right now. It's the best performing position in my portfolio this year.

I am trying to figure out if the same thing happened to Rivian stock -90% will happen to TSLA but in a delayed fashion before taking off again. I have never went through a bear market so I don’t know if profitable companies get pushed down as hard as the other before recovering or if the drop will stabilize around -50/-60%

 

[juanmedina]

I am trying to figure out if the same thing happened to Rivian stock -90% will happen to TSLA but in a delayed fashion before taking off again. I have never went through a bear market so I don’t know if profitable companies get pushed down as hard as the other before recovering or if the drop will stabilize around -50/-60%

In my mind it should not go down like Rivian becuase Tesla actually makes money.

Is anyone feeling like selling their Tesla shares? I feel like getting out of this stock and go all cash if we hit $300 again. I just don't think we will see AH for years which will happen IMO after the Fed pivots and inflation seems really under control. I really want to see what happens after the Twitter mess ends; I was really surprised how the stock split, S&P investment upgrade did nothing and wonder if the "shares buy back" if it happens will do the same. I think Q3 ER will be good but Q4 deliveries might again hurt the growth story which is what drives the stock:

I am just venting here....

 

[EVCollies]

In my mind it should not go down like Rivian becuase Tesla actually makes money.

Is anyone feeling like selling their Tesla shares? I feel like getting out of this stock and go all cash if we hit $300 again. I just don't think we will see AH for years which will happen IMO after the Fed pivots and inflation seems really under control. I really want to see what happens after the Twitter mess ends; I was really surprised how the stock split, S&P investment upgrade did nothing and wonder if the "shares buy back" if it happens will do the same. I think Q3 ER will be good but Q4 deliveries might again hurt the growth story which is what drives the stock:

View attachment 864593

I am just venting here....

I was 80% HODL. Was assigned with my last CSP so now 100% TSLA but will sell those share when we return to 300sh. I have a rather large tax bill 4/15/23 so am hoping for a bump somewhere along the way.

 

[intelligator]

not seeing ATH for years, yikes! what worries me the most is time value left on several DITM spreads. I have 383 short leg spreads that I pushed to June '23 , 1.33 left. -300csp and a short legged -300p for December, .74 and 260/200 bps for the 28th of Oct , .44 ... The long puts are under water as well; I'd need to sell anything assigned, wiping out most all gains for 2022. From a tax perspective, I'd balance out the capital gains from having a bunch of low cost basis shares called away. by closing these out at a loss, I suppose I can start fresh by writing aggressive CC against 2100 shares, slow accumulating of cash to sell CSP. It's the BPS, rolling of, that hurt me the most. Had I closed them at what I thought was a huge loss back then ... another dumb rookie move.

 

[kabin]

I am trying to figure out if the same thing happened to Rivian stock -90% will happen to TSLA but in a delayed fashion before taking off again. I have never went through a bear market so I don’t know if profitable companies get pushed down as hard as the other before recovering or if the drop will stabilize around -50/-60%

All stocks tend to become correlated in bear markets. Low beta, high beta doesn't matter in a bear market. As they say eventually they come for all stocks. On the other hand, the good stocks tend to be the first to bounce back. The trick is saving powder for the turn around.

 

[JustMe]

I’m a bit more hopeful for a solid recovery for TSLA next year if financial projections are anywhere close to accurate. Confident and positive guidance on the ER will be an extremely important lifeline for investors between here and there.

P.S. Futures are green

 

[adiggs]

I am trying to figure out if the same thing happened to Rivian stock -90% will happen to TSLA but in a delayed fashion before taking off again. I have never went through a bear market so I don’t know if profitable companies get pushed down as hard as the other before recovering or if the drop will stabilize around -50/-60%

All stocks tend to become correlated in bear markets. Low beta, high beta doesn't matter in a bear market. As they say eventually they come for all stocks. On the other hand, the good stocks tend to be the first to bounce back. The trick is saving powder for the turn around.

I saw and experience something like this back in the 08 / 09 timeframe. Found a company paying a 10%+ dividend that all my research said should have been 5%. The company was mispriced by 1/2 ($40/share instead of $80/share it was worth).

This was a pure dividend play. The company had a many-year history of increasing the dividend every quarter.


The explanation that I ran into back then and that has stuck with me, is that in a big enough bear market, accounts (people, trading entities, ..) reach a point where they're getting margin calls and they have to sell something to meet those calls. If the dogs in the portfolio aren't worth all that much, then eventually the companies paying a 5% dividend in a nearly 0% interest rate environment also get sold. Because you've got to sell something of value to meet the calls.

That is how I think of it - why good, profitable, growing companies can go into the tank as part of the larger market.

 

[SebastienBonny]

While the current situation isn't terrible for me at this point, it gets you thinking about using your margin selling puts (in my case).
I try to avoid it, but have a jan 25 sold put that almost gets me out of margin.
A decline of the SP to 195 would give me a margin call, so really considering buying a protective put.
There will be some extra cash as margin the coming days, but not today, so a cheap bought put (same expiry date, strike 30) should give me enough cushion for a drop to 150ish (am I really saying this?). I could sell the bought put higher should we drop lower and when the extra cash delivers the margin needed.

Any thoughts?

FYI: futures look green now and Tesla trades higher in early pre-market, but in these circumstances, a pop today just looks the right time to buy an even cheaper protective put, just in case.

 

[OrthoSurg]

The first call I bought at close Friday might be green this morning. Might close it at open and sell CCs again. Are we really going to have a run up into earnings? 2 days of green for once?

 

[scubastevo80]

Are you all actually considering selling covered calls into this just to take advantage of the IV drop? I'm looking for an entry or short-term bounce trade. Likely eyeing either a bull call spread that I'll close before earnings release.

 

[corduroy]

buy SQQQ shares / calls if hedging is neccessary. My target for it is 90 before this crash is over.

Thank you for the tip about SQQQ. Looks like a good way to hedge without having to buy puts or actually short something. If the market is up today I might looking to start a position in the 50's