Wiki Selling TSLA Options - Be the House

[Max Plaid]

Sold 15x Jan 24 -c266.66 against -c233.33's (not exactly against, no link with my broker, just in my head) @$41.1

Slightly too early as it turns out, but still OK - timing the market is hard, as they say

This is ostensibly a downside hedge, of which I've a few set up now, but my long positions far outweigh the shorts, so happy for us to go to ATH ASAP

 

[OrthoSurg]

I sold a few $215 and $220's for next Friday. I am thinking about waiting until next week to maybe sell the same strikes ATM.

I sold for 210 for next week, Maybe I was too agressive

I closed my 200 CCs today for +85% profit on the dip this morning.

 

[BornToFly]

SPY and QQQ above the 50 Day. Bullish going into next week. Last time the rally lasted a month.

I have a few CC at 200 and 205 in the next few weeks. Would be happy to roll them up (by selling new ones to help pay for it as explained here a couple days ago).

 

[Max Plaid]

SPY and QQQ above the 50 Day. Bullish going into next week. Last time the rally lasted a month.

I have a few CC at 200 and 205 in the next few weeks. Would be happy to roll them up (by selling new ones to help pay for it as explained here a couple days ago).

Let the good times roll, literally!

 

[OrthoSurg]

SPY and QQQ above the 50 Day. Bullish going into next week. Last time the rally lasted a month.

I have a few CC at 200 and 205 in the next few weeks. Would be happy to roll them up (by selling new ones to help pay for it as explained here a couple days ago).

Rolling CCs during a bear market is the most satisfying and reassuring thing to do during the day.

 

[dl003]

This is super interesting and would like to know more about this process.

This is something I think I've been doing, but couldn't put into an equation like I think you are stating.

Would you share more on this process? or if you already have and I missed it, I'll go looking for it...

Edit: Just to be clear, I think I'm just doing the wave 1 thing, where a bunch of big calls are placed and then we end up seeing a big push higher (barring any big negative macro stuff).

This most often occurs during a period of consolidation, like in a bull flag. During the initial bounce from the low, it was mainly short covering. Longs are not interested in buying the pump. Once the initial the high is in, the the stock pulls back, still respecting support, then longs would add calls throughout the day, betting on a resolution of the bull flag to the upside. This call buying maintains upward pressure on the stock until the remaining shorts begin to feel the heat. They then cover at the last minute + late bulls jumping on the train. The next morning, the stock gaps up, call buyers unload, leading to de-hedging by MM and that stock marks a local top.

Because the stock makes a local top after a relatively lengthy period of consolidation, bearish divergence is developed which is a sell signal for traders. This usually happens at the end of an up wave, most often 1 and 3. For wave 3, since it is often the most powerful wave in the sequence, this can occur at multiple points.

 

[Cherry Wine]

I'm mostly self taught. The only reading I do is Elliott Wave Theory: Rules, Guidelines and Basic Structures
I hang out with a lot of good self-taught traders. I know they're good because for every 1 of them, there're 99 others I'm actively trying to avoid lol. So I've observed a lot of trading styles and indicators used. I've cycled through many until I found a set of indicators well suited for calling moves and limits in TSLA. These are not necessarily effective for day trading & scalping but for my purposes they're perfect:

a. Trend lines & bollinger band to set up the background
b. RSI & MACD to gauge momentum
c. EWT & fib levels to guess the limits
d. Option flow for signals of big incoming moves

My edge is really not in EWT but in detecting option flow. For someone who sells a lot of naked calls & puts of different strikes and dates, I can clearly see when something is out of wack the moment big orders hit the exchange. Instead of using services like Tradytics which can be a hit & miss, I can see in real time when a huge bet is placed on / against TSLA. These correspond very well with EWT. For example: huge call flows are often observed at the end of wave 1. That's when I know I should brace for a local blow off top the next day. I can close some naked short calls with high delta and low theta & reopen them on the pump; closing short puts is also so smart. Call flows are also detected at multiple points during wave 3, especially at the end. Put inflows appear much less often and don't follow any schedule but they're much more deadly.

What tool do you use for option flow? This seems very useful.

 

[corduroy]

My -205s calls that I sold on the bump yesterday closed out. I was optimistically hoping to have to manage those. Now I'm just holding the 12/23 perma rolled -245, and -250 puts.

Unrelated to TSLA, my first buy write experiment just ended on AMZN, I made $4.30 in total. I ended up trading in an out of the call 3 times in the week boosting the credits. I decided to let the -94c take the shares back instead of rolling out to next week, mainly because I wanted the cash back and I don't want to own AMZN. I learned a lot and will now be looking to try it on TSLA when the setup looks right.

 

[adiggs]

Decided to close my 183/153 bps for next week expiration. I rolled into this earlier in the week when the shares were close to 175 - just too deep ITM to wait it out.

If I'd waited it out then I'd have been able to close today at any price of my choice. Probably would have chosen around .40, making for 1.80 in and .40 out - a great result.

Except I didn't wait, and rolled instead. With the bump up I was able to close the rolled position for 2.40. About 2.00 in and 2.40 out, for a .40 loss. This is the risk when rolling - I could have continued holding the 183/153 bps into next week and see what happens. I decided that the current loss was <1 week of income and I feel a lot more comfortable waiting for Monday morning without that BPS. At one point earlier in the week this was a $10 loss on a $30 wide spread (assuming held to expiration). Losing 30% == bad. Considering how recently that position was ITM, I didn't want to risk going right back.

If we do open with a drop on Monday then I'll surely be reopening the position.

 

[dl003]

What tool do you use for option flow? This seems very useful.

I track the premium myself. I sell a lot of TSLA calls and puts and everyday they rise and fall in rhythm with the SP. However, there are days when calls seem to fall a lot for no reason which means someone is unloading a crap ton of calls - TSLA is going to get dumped shortly. In the old days, whenever that happened I felt great because suddenly my account would go very green without much help from the SP. However, the next day the stock would get destroyed without fail and my account very red. So, now when I see my account super green disproportionately to the change in SP, I get defensive. On the opposite side, if my account barely goes up with the SP and keeps sliding even though the SP doesn't make any drastic move, big whales are loading calls and they are going to get their payday. When I see that, I just roll up my weeklies, leaving my monthlies and leaps alone since the pump will be over in a couple days. Same thing for puts. Last Thursday the stock was green but my puts actually went up. That's as alarming as it gets.

 

[Yoona]

today's daytrading income was ~$6/share (ie $6000 if 1000 shares)

1st buy was on the arrow when sp retraced down to the fib 50%; an Outside Bar was detected (bullish if above supps) and heatmap indicated plenty of supp below

2nd buy was on the arrow when sp landed down on yesterday's High and the 5-min mid-BB; an Outside Bar was detected (bullish if above supps) and heatmap indicated plenty of supp below

still learning the ropes... OB alone is not enough as buy signal, i pair with other TA for confirmation (i like fibs/MA/MACD)

aside from options, this is my plan to de-risk and hopefully generate more income (see where the algos are going and follow or wait there)

 

[OrthoSurg]

Si what is expected in the short and mid term? A little rally before next leg lower?
I don’t wanna be too agressive on selling CCs but The market made me bearish and I expect a pullback

 

[dl003]

Si what is expected in the short and mid term? A little rally before next leg lower?
I don’t wanna be too agressive on selling CCs but The market made me bearish and I expect a pullback

I say we go sideway with volatility way down till next CPI.

 

[JSML]

I say we go sideway with volatility way down till next CPI.

This is also my take.

Sold naked puts at 183 this morning along with CCs at 207.5, 212.5, 217.5 and 222.5. All expiring Nov 18.

 

[JustMe]

Si what is expected in the short and mid term? A little rally before next leg lower?
I don’t wanna be too agressive on selling CCs but The market made me bearish and I expect a pullback

A few analysts are now calling this the market bottom. And some analysts are expecting a U shaped recovery rather than a V shaped recovery in the stock market on expectations of a recession. We are talking months to a year or more to reclaim levels from early this year. That would be supportive for milking CCs on the way back up.

I agree with this outlook. I expect ups and downs but generally an upward trajectory for TSLA from here. I avoid placing any long term options trades though because it’s so unpredictable.

I’m still mostly day trading options including CCs. I’ll sell and repurchase the same day. I did that three times today. 192 & 195 strikes. I sometimes end up with CCs that run away me and I will roll out a week. Good thing is this can always be done for profit or strike improvement and can be paired with bps. Avoid selling CCs on all your shares down here or risk getting trapped.

 

[BornToFly]

today's daytrading income was ~$6/share (ie $6000 if 1000 shares)

1st buy was on the arrow when sp retraced down to the fib 50%; an Outside Bar was detected (bullish if above supps) and heatmap indicated plenty of supp below

2nd buy was on the arrow when sp landed down on yesterday's High and the 5-min mid-BB; an Outside Bar was detected (bullish if above supps) and heatmap indicated plenty of supp below

still learning the ropes... OB alone is not enough as buy signal, i pair with other TA for confirmation (i like fibs/MA/MACD)

aside from options, this is my plan to de-risk and hopefully generate more income (see where the algos are going and follow or wait there)

View attachment 873708

Wow, you timed both bottoms almost perfectly!
Can you zoom out to show what drop/climb you used to find your Fibs?

 

[dl003]

How to pick a safe strike for your CC at this low level of the SP:
Start of the decline: 315
End of the decline: 175
Wave 1 of the new rally / bounce typically doesn't exceed 0.382 retracement of the decline. Top of wave 1 most likely will be at or below 230.
Wave 2 will ALWAYS retrace at least 50% of wave 1.
Start of wave 1: 175
End of wave 1: 230 MAX
Minimum retracement of wave 1, assuming it reaches max potential: 202.5
Therefore, at this point if you sell a CC for 11/18 higher than 202.5, you'll be safe.
Yes, TSLA can and will most likely go above 202.5
However, at some point it will retrace back to 202.5 or below before going higher. The only risk is TSLA reaches 230, retraces back to 202.5 and shoot higher within the same week. If that happens, you have to make quick decision to roll your CC out. Picking a CC 3-4 strike above gives you more flexibility, hence I picked 215 & 210.
What you don't want to do is stand in between TSLA and its wave 3. When a double bullish divergence can be observed on a 1h+ timeframe at the end of wave 2, you know TSLA is ready to go higher and the limit for wave 3 is a lot higher than wave 1.
See chart. Note that 230 is the theoretical max for me. I'm not guaranteeing TSLA will hit 230 for wave 1.

 

[Oil4AsphaultOnly]

So no Form 4's filed for Friday. That means all the action from Wed-Fri were just normal trading. Isn't 100m+ shares traded daily significantly more than normal?

Edit: Just realized that Thursday & Friday could still be Elon selling again (from a deductive reasoning standpoint).

Edit: Didn't know that Edgars was closed on Friday, so I guess it's all still possible.

 

[OrthoSurg]

How to pick a safe strike for your CC at this low level of the SP:
Start of the decline: 315
End of the decline: 175
Wave 1 of the new rally / bounce typically doesn't exceed 0.382 retracement of the decline. Top of wave 1 most likely will be at or below 230.
Wave 2 will ALWAYS retrace at least 50% of wave 1.
Start of wave 1: 175
End of wave 1: 230 MAX
Minimum retracement of wave 1, assuming it reaches max potential: 202.5
Therefore, at this point if you sell a CC for 11/18 higher than 202.5, you'll be safe.
Yes, TSLA can and will most likely go above 202.5
However, at some point it will retrace back to 202.5 or below before going higher. The only risk is TSLA reaches 230, retraces back to 202.5 and shoot higher within the same week. If that happens, you have to make quick decision to roll your CC out. Picking a CC 3-4 strike above gives you more flexibility, hence I picked 215 & 210.
What you don't want to do is stand in between TSLA and its wave 3. When a double bullish divergence can be observed on a 1h+ timeframe at the end of wave 2, you know TSLA is ready to go higher and the limit for wave 3 is a lot higher than wave 1.
See chart. Note that 230 is the theoretical max for me. I'm not guaranteeing TSLA will hit 230 for wave 1.
View attachment 873842

Don’t be shy to come here and write in BOLD when you expect Wave 3 to happen after you see a bullish divergence. I think a lot of CC sellers here will benefit from a little hint

ggr said RSF is gone again on vacation so now your TA posts are more than welcomed here

 

[Chenkers]

So no Form 4's filed for Friday. That means all the action from Wed-Fri were just normal trading. Isn't 100m+ shares traded daily significantly more than normal?

Edit: Just realized that Thursday & Friday could still be Elon selling again (from a deductive reasoning standpoint).

No lodgements on Friday due to the EDGARS lodgement office being closed for Veterans Day Holiday. So Elon can still lodge all forms covering Wednesday to Friday (where they exist) by 10pm on Monday.