Wiki Selling TSLA Options - Be the House

[bkp_duke]

I'm looking at a double bullish diversion on the 30m timeframe. A convincing diversion requires the stock to make a lower low than 210. It could be running an extended flat or running flat formation, both of which have wave B to extend 1.236x of wave A. As such, the target is conveniently 207.

View attachment 871081

We just hit 207 . . .

 

[vikings123]

I'm looking at a double bullish diversion on the 30m timeframe. A convincing diversion requires the stock to make a lower low than 210. It could be running an extended flat or running flat formation, both of which have wave B to extend 1.236x of wave A. As such, the target is conveniently 207.

View attachment 871081

205 is the lower BB and we bounced there. If we close below 205 I'm buying more puts for next week.

edit: The Nov 04 200$ *sugar* puts I bought during the week have a chance, who woulda thought!

 

[UltradoomY]

So this is a time to buy some calls?

I like buying calls (sometimes puts too) and right now is a great time for me (not advice, etc.) I just picked up a lot (for me) of the November 18th $230 calls for $1.85 each.

Reasoning is that CPI is out that week on the 14th, it is a monthly expiration, $230 is where we have been a number of times and looks like a good bounce number.
Have already set to sell half for $3.75 to pay for them and the rest will figure out.

 

[scubastevo80]

Can we please close above $200 today so my IC expires worthless? I was unfortunately doing some hard yakka this morning (someone in town is letting us take bricks they couldn't use for our garden) and failed to close this when it was $0.01 until 11:30.

 

[dl003]

We just hit 207 . . .

Don't worry. Be happy. I'd like to talk to the guys shorting TSLA 6 points away from 52W low 2 months before Q4 P&D, before 2 massive events next week. We'll bounce next week.

 

[ReddyLeaf]

Ouch that hurts. Maybe the hedge funds are targeting a new 1-yr low today to match last year’s ATH (Happy Anniversary). Rolled my 11/25 225s straddle to 12/2 220s. Didn’t like the trading into the noon hour. A bunch of my share buys hit in the 204-209 range, so now I’m cash poor even with rolling down and out. I still have a few orders left down to $189.xx that I hope won’t hit.

Unfortunately, I started with buyback of the calls, expecting a bounce. Well, that didn’t work out so well, further confirming that I cannot predict SP action. I should have bought back the puts first because the SP kept dropping. That’s the problem with trying to time the market, even when it looks like the SP is stable, it can drop farther or rocket higher at any instance.

 

[Yoona]

STO ITM B/W 11/11 -c200 @10.05, 205 cost basis

 

[adiggs]

Over the last few weeks I've been seeing more and more technical analysis seep into this thread, with all the graphs that go with it, and I'm not sure if it has enough merit. The predictive value doesn't seem very high, if only because some of the predictions are that we could go up or down.

This is an options thread, where we are supposed to talk about calls, puts, premiums, assignment, gamma and theta. But I'm reading about Fibonacci levels, Bollingers Bands, MA and VIX. So the separate thread is a good solution.

I wanted to add my nickel here. This is a tough one for me. I've read the other comments about this idea and here's what I've got.


First up - I'm in the camp that is finding value within the wider range of information and trading styles being discussed. There is a wide range of stuff that I have no interest in and am finding no particular value, but that is just fine. I still get something and its more likely to damage the value of the thread to try to separate it out. The noise to signal ratio is still low.

I've got a historical perspective that I expect many lack. I created my account and got active on TMC in 2012. For the first 6ish years (though end of 2018) we would have two investing mega threads created at the start of each year -- a short term, and a long term, investors thread. The idea was a good one and failed miserably. It failed because all of the activity was in the short term thread, drawing all of the chit chat, OT, day trading, TA, long term investing, and everything else Tesla / TSLA / random thought of the day stuff into that thread. The short term thread was turning over as the main thread does today, while the long term thread would often see 0 posts on a day, and rarely a page of posts in a day.

For me as a long term investor the combination didn't work out. I wanted to see long term information and discussion, but there wasn't any. The short term thread was turning over so fast that I couldn't keep up, and the ratio of long term info was so low that it was a waste of time to suss it out. Part of that turnover was discussion we have going on in this thread - TA (with charts and graphs), option trades, day trading; the very short term and trading focused stuff. As a board we could never get the short term and long term stuff separated.

Of course it still isn't and never will be, but the current structure is a lot better. I get the bulk of what is important to me on a daily basis in a thread that turns over a lot slower (still multiple pages a day, but not yet overwhelming to me). That was never my intention or consideration when I started the thread - its just how things have evolved. In retrospect we probably couldn't have created this split intentionally - it has only arisen organically.

Even though I spend little time in the main thread, I also get more out of it today than I did back then.


There have been TA threads in the past and there have been other more generic option trading threads in the past. They have all died off over time, I think because they were a lot more about broadcasting information, with a fairly small collection of participants with skin in the game. This thread is full of people trading in nearby spaces, carried by a theme of selling options (but not exclusively so), with skin in the game. We all care deeply about what goes on here, both as contributors and as consumers.

Is it possible to split the TA and day trading stuff out? Maybe. My suggestion is that we don't try to make that split for at least another month or three - let it ride as is and see how things continue to evolve. The balance here is if the daily post count gets too high, and especially if that high post count carries a high noise to signal ratio, then we'll start losing people (or we'll get a thread split). If the new stuff incorporates, daily relevance remains high to a large number of contributors, then we just keep on as we are.

My fear is that splitting some content out to a second thread will be a net negative - people will need to read 2 threads for the same info, not sure what they'll find in each, and end up dropping both. Leading to this amazing community falling apart. I can stand a higher noise to signal ratio than I am currently experiencing in the thread in order to continue being part of this community.


One thing I am comfortable making an ask of all - continue to think about your posts and whether they are contributing something. In the past the daily post count was low enough (a page a day typically) that the thread could handle a lot more chit-chat than it can today. With multiple pages a day, the chit-chat becomes more of an issue.

Also trading posts that indicate a trade but with no further context, thoughts about the choice, or other information beyond "sold X option for Y credit" -- with the other activity these become noise, at least for me. That same post, but with additional context about management plan, or other observation that seems interesting - those are valuable to me at least. I also find that when I think about that additional context, I (edit: frequently) end up not making the post.

My method for choosing what to post is pretty straightforward - if there is something in my thinking that stands out to me, then I also think it likely to be interesting to somebody else, and I post. If there isn't anything particularly new or worth emphasizing (in my mind, to me) from past stuff, then I don't bother posting.

So be choosy about what to post and when, but also don't get too choosy. I for one really want to see the TA posts continue - the official TA thread has nearly 0 activity, I think because people with skin in the game need to post in multiple places to put things there, and TA with no skin in the game seems pointless to me (and posting activity seems to support). TA is highly relevant to most all of us here.

I guess one ask I have of the TA posters - continue providing links and insights into what you read / watched / studied, what tools you are using - information that others will find valuable to follow in your footsteps and gain their own ability to do what you do. Something like the OA option basics videos linked at the beginning of the thread. I'm interested in learning TA, realizing that there is a lifetime of stuff to learn - help from others about how to be focused in those efforts will be hugely beneficial. Getting started with it is a big enough lift that I haven't started.

I also pledge to add posts focused on "learning TA" to our wiki page so they're easy(er) to find and help new people that come along.

 

[SebastienBonny]

Same. That didn't go as planned. lol

No, but after the second leg up I sold 235CC for 2.37.
Obviously closed that contract when the whole thing collapsed for 0.93 to get a 60% gain in two hours.
Waiting for a rebound today won’t be needed I guess...

 

[adiggs]

With shares down to 203, I closed yesterday's 11/11 230cc for .70, about a 70% gain in 1 day. My trading rule emphasizes taking winners like these early - I expect a good entry early next week and now I'm ready to take advantage. The fact that I missed a commissionless close by .05 didn't enter into my thinking.


I also consider 200 to be strong support (or 198.5 ) - that's $600 in pre-split money, and we didn't spend much time below that level previously. That doesn't mean that we can't spend more time below, but I'm using that. I'm also trying to update my thinking to post-split / current numbers; that's coming along slowly, as it did before after the 5:1 split.

With the drop to 203 I've opened 185/155, and 190/160 put spreads. Most are the 185s but I decided to get a bit more aggressive with some of them. Turns out that missing the 1.60 fill I was looking for yesterday on 195/165s got me 1.50 today using a $10 better short strike. Happy days!


I also used realized gains from one of those cc positions closed today to also close a Feb '23 275 strike put. The realized cc gain offset all of the cost to close the put, leaving me with a net realized gain on the two positions, and 1 less DITM short put. I'll continue using realized results to pay off these DITM short puts, freeing up cash backing for other uses. I didn't close the position - just 1 out of the many DITM puts.

The downside of using realized gains from cc's is that these tend to happen on down days, such as today, leaving me with a relatively bad closing time for the short puts. I also decided not to sweat that - if I were holding out for a later and better day to use today's profits, then I'd need to keep track of that and decide when that time had arrived. Ugh = I won't do that in practice, so I'll just go with a new trading view - use realized gains on the spot to clear up bits of less desirable trades that I want to clear up rather than take assignment on.

I am particularly NOT using the received credit to pay off a short put. Couple of reasons - I rarely realize all of the credit as a gain, so using the credit to pay off a DITM put can easily be a net loss. But mostly entering BPS happens at a relatively low share price, and closing that DITM put at the same time gets me a relatively bad close. Using gains from the BPS to close a DITM put later will tend to align well - a good point in time to close the BPS will also be a good time to close the DITM put.

 

[dl003]

We will not break 198.5 before Thursday. Like I mentioned, it is essential for TSLA to remain above 198.5 for this to not be seen as a dead cat bounce. This has HUGE implication for the entire market. If TSLA breaks 198.5, it will bounce back at some point - no doubt about it. It will go a lot higher than 237 - also no double about it. However, it will still be just a dead cat bounce. If all TSLA is doing is a dead cat bounce, then what does that say about the market?
See, breaking 198.5 is the easy part. But in doing so, the power that be will signal to the entire market that there is NO HOPE whatsoever left. I'm not saying 198.5 can't be broken, but it won't be broken willy nilly. There has to be a big enough reason and there really is none before CPI. It also means that by Wednesday we all need to reduce our leverage, hedge, and hunker down. TSLA 198.5 gone, so is the market. Once someone becomes brave enough to make that commitment, it will rain fire and brimstones.

If you need hedges, an idea would be to buy UVXY calls. VIX has been pretty subdued while SQQQ has run up quite a bit.

 

[Right_Said_Fred]

With shares down to 203, I closed yesterday's 11/11 230cc for .70, about a 70% gain in 1 day. My trading rule emphasizes taking winners like these early - I expect a good entry early next week and now I'm ready to take advantage. The fact that I missed a commissionless close by .05 didn't enter into my thinking.


I also consider 200 to be strong support (or 198.5 ) - that's $600 in pre-split money, and we didn't spend much time below that level previously. That doesn't mean that we can't spend more time below, but I'm using that. I'm also trying to update my thinking to post-split / current numbers; that's coming along slowly, as it did before after the 5:1 split.

With the drop to 203 I've opened 185/155, and 190/160 put spreads. Most are the 185s but I decided to get a bit more aggressive with some of them. Turns out that missing the 1.60 fill I was looking for yesterday on 195/165s got me 1.50 today using a $10 better short strike. Happy days!


I also used realized gains from one of those cc positions closed today to also close a Feb '23 275 strike put. The realized cc gain offset all of the cost to close the put, leaving me with a net realized gain on the two positions, and 1 less DITM short put. I'll continue using realized results to pay off these DITM short puts, freeing up cash backing for other uses. I didn't close the position - just 1 out of the many DITM puts.

The downside of using realized gains from cc's is that these tend to happen on down days, such as today, leaving me with a relatively bad closing time for the short puts. I also decided not to sweat that - if I were holding out for a later and better day to use today's profits, then I'd need to keep track of that and decide when that time had arrived. Ugh = I won't do that in practice, so I'll just go with a new trading view - use realized gains on the spot to clear up bits of less desirable trades that I want to clear up rather than take assignment on.

I am particularly NOT using the received credit to pay off a short put. Couple of reasons - I rarely realize all of the credit as a gain, so using the credit to pay off a DITM put can easily be a net loss. But mostly entering BPS happens at a relatively low share price, and closing that DITM put at the same time gets me a relatively bad close. Using gains from the BPS to close a DITM put later will tend to align well - a good point in time to close the BPS will also be a good time to close the DITM put.

Thanks for your insights. It’s still ‘your’ thread, so for me as mod your opinion is pretty important. But so is the feedback from others. Mods cannot be omnipotent tyrants, we also need to listen to what members want. So let’s see how the thread evolves over the next few months.

 

[dl003]

IMO 210 level will be key. They keep coming for weekly puts. If that does not hold I'm not sure we see 224 next week.

I reworked the levels and you're right. Right now we're looking at 217 - 220 max for the bounce. I'm leaning toward 217.

 

[adiggs]

TSLA 198.5 gone, so is the market. Once someone becomes brave enough to make that commitment, it will rain fire and brimstones.

I realize we're all not-advice, and make our own decisions to experience our own consequences....

Can you elaborate on this? I would associate something like this with the Great Depression where the stock market traded down 90% from peak to trough. Were TSLA to do that we'd be looking at $415 down to $42. Back in the 1930s that was most of a year to make the move, but things happen faster these days. Could this sort of a crash finish over a month?


My thinking, unguided by anything resembling TA etc.., is that something like 180 (540 pre-split) is about as low as we can go. Macro is much worse now than it was then, but buying pressure and fundamentals start overwhelming the push downwards by drawing in buyers. The 170ish range gets us to about 500 pre-split, and every $ down looks and feels to me like trying to squish a fully squished spring.

Then again - an important less from the various market drops over the decades is that there is always more room below . In 08/09 I was the beneficiary of buying an excellent dividend paying company at 1/2 price. The best rationale I read about that along the way is that when margin calls were rolling in, people eventually had to start selling anything and everything that was retaining value. Everything went down, though of course not equally.

So I guess these are my own thumb-to-the-wind view, today, of fire and brimstone over the next week or 2 -- 180 or 170. I think neither likely, but when I see verbiage like that from an opinion I respect, I like to learn more.

 

[adiggs]

With the drop to 203 I've opened 185/155, and 190/160 put spreads. Most are the 185s but I decided to get a bit more aggressive with some of them. Turns out that missing the 1.60 fill I was looking for yesterday on 195/165s got me 1.50 today using a $10 better short strike. Happy days!

And with the move back up to 207 - 208, that was enough for those put spreads to have 40% gains in a couple of hours. The positions were also large enough that the realized gains were enough to take more of those 275 strike csp off the table, so I've closed the short leg of all of these BPS.

I decided to keep the long legs (155 and 160 puts) over the weekend, as I figure there is a non-zero chance I'm re-opening 11/11 put spreads on Monday -- this way the short legs are ready to go. If i'm wrong, they're worth about .08 as I write - real money, but they'll be a lot more expensive than that on Monday if I am opening new 11/11s, and the downside of holding them is small.


I say that I don't day trade, and I'm definitely not looking to make that my practice. I'm also not averse, and even look look for, opportunities like this to take significant gains in such a short time.

I also believe, with only my trading experience to back me on this, that these quick closes are a benefit of further OTM positions. They are relatively small $$, but you can get quick high % moves in their value from pretty small moves in the share price. In this case about 40% of value for $5 move in share price over 2h.

 

[BornToFly]

I feel for you — margin calls suck.

But I would also prefer to keep TA in TA threads and day-trading stock out of the options thread. No offense to any TA fans but personally I don’t really believe it has good predictive power, so to me it’s reducing the value of this options thread. No reason it can’t live in its own threads for those who feel differently.

Well, I think it depends on who is doing the prediction. Dan Shapiro made a fortune today because on the Webinar this morning, 30 minutes before market open, he identified all the companies that looked to break down at the open so everyone could successfully short them. As TSLA was rising, he said he didn't trust it, and said if it came down to 218 he would short because it could run to 210. If it broke 210 it would see 205. He nailed both legs 100% (some members on the chat appear to have made their monthly income goals in a single day on just that call). BTW, he thinks TSLA could see 198 next week, and 180 is possible if the market breaks down farther.

Edit: I didn't catch the exact volume and strikes, but apparently there were $ Millions of Puts bought for December in the 170/180 range today (before the drop happened). Really scary stuff.

 

[dl003]

I realize we're all not-advice, and make our own decisions to experience our own consequences....

Can you elaborate on this? I would associate something like this with the Great Depression where the stock market traded down 90% from peak to trough. Were TSLA to do that we'd be looking at $415 down to $42. Back in the 1930s that was most of a year to make the move, but things happen faster these days. Could this sort of a crash finish over a month?


My thinking, unguided by anything resembling TA etc.., is that something like 180 (540 pre-split) is about as low as we can go. Macro is much worse now than it was then, but buying pressure and fundamentals start overwhelming the push downwards by drawing in buyers. The 170ish range gets us to about 500 pre-split, and every $ down looks and feels to me like trying to squish a fully squished spring.

Then again - an important less from the various market drops over the decades is that there is always more room below . In 08/09 I was the beneficiary of buying an excellent dividend paying company at 1/2 price. The best rationale I read about that along the way is that when margin calls were rolling in, people eventually had to start selling anything and everything that was retaining value. Everything went down, though of course not equally.

So I guess these are my own thumb-to-the-wind view, today, of fire and brimstone over the next week or 2 -- 180 or 170. I think neither likely, but when I see verbiage like that from an opinion I respect, I like to learn more.

We're not gonna go down 90% from here. We are hanging around the 376 level in SPY. It is right now unclear to many bulls and bears whether the market has bottomed / the bear market rally is over. Traders try to find clues, looking at leading stocks such as TSLA and AAPL. As far as they know, TSLA has found a bottom @ 198.5. Whenever this happened in the past, it would rally hard and the market with it. However, the question is what kind of rally we are going to have this time. If it's an impulsive rally, it can be the beginning of a bull market in TSLA. Bears simply have no idea how high it's going to go. If it's a dead cat bounce, sooner or later it will go back down, to a level much lower than 198.5. If it's a dead cat bounce, it speaks volume to the fragile state of the market. The line separating a real bull run from a dead cat bounce is whether TSLA breaks 198.5 in the near future. An impulsive rally structure does not allow for a lower low once THE low has been in place. TSLA breaking 198.5 will be the signal that bears are in full control of the market. An entity willing to short and hold TSLA down below 198.5 has to have the firepower and be sure that SPY will also crash or they risk getting squeezed. So, I treat TSLA breaking 198.5 like I'd treat VIX above 35 or yield above 4.5%. It's an ominous sign that a lot more pain is coming.

 

[dl003]

I've noticed FSLR and ENPH also down big today and these 2 solar stocks have been exceptionally strong in 2022. Today's drop might just have been traders positioning for a possible Republican takeover of Congress and a possible reversal of renewable credits - nothing sinister going on and may reverse itself in the near future.

 

[Max Plaid]

Well that sucked! I think the -3.5% from yesterday's to today's close wasn't so dramatic in the end, but rather the relative strength of TSLA all week and at open today put us cerebrally into the 230's, so a close below 210 was most unexpected, unpleasant and unwelcome...

Nevertheless, I took advantage, albeit rather too early, to close my 11/11 -c220's and Jan 24 -c300's for decent profits - will resell the Jan 24 -c300's when we pop back up

Many factors against us today, AAPL falling hard, Elon talking trash, Twitter down the shitter, etc., but I also feel it was a moment for the mega caps that hadn't yet capitulated to take some hurt = AAPL & TSLA (no idea why AAPL has been attacked this week, weird)

Thinking this is overeager shorties and looking for a green Monday to resell some shite - wishing you all a good one. Not our first rodeo...

 

[kabin]

Thanks for your insights. It’s still ‘your’ thread, so for me as mod your opinion is pretty important. But so is the feedback from others. Mods cannot be omnipotent tyrants, we also need to listen to what members want. So let’s see how the thread evolves over the next few months.

My 1/2 cent would be keeping the same focus as the last 1000 pages and lose the busy TA charts.