Wiki Selling TSLA Options - Be the House

[intelligator]

The Chart Master video posted on see-en-bee-see was a tough to watch , the "lines are drawing themselves" followed by several analysts again highlighting that this is an auto stock, should be valued like the others... so script like of them. Anyway, I had rolled out WAY DITM BPS, might have one more stop , still 2 bucks of extrinsic left in them. I'd like to roll down and in a bunch of calls but am afraid that if we mysteriously move up, I then have a problem I don't have today. Lastly, I closed the ratio spread from Friday for this week at 90%. I didn't get a chance to write another closer to the money. One side says sell but I'd give back 50%. The other is saying you might have to give back more. Ugh. Sorry mods, didn't want to rant, just had to.

 

[Cherry Wine]

So far the shorts have acheived the new 52 week low at $176.55 (previous ~$177.2). Our previous low closing price was $177.59 on 9th November. So now we need to stay above that at the close to prevent a lower low. MM's may assist to see us over the big Put wall at $180 but then they haven't been very helpful with Put walls of late.

I'm hoping we can continue to bounce back from here and go on to form a double bottom. Hopefully that will be bullish enough to carry us higher into next week and beyond.

If this keeps up by the time we have a third consecutive good ER TSLA will be a five dollar stock with a PE of 0.4.

I think almost everything we are seeing is about China right now. The market doesn't believe TSLA can close on the promises of 4Q and believes that a shutdown could come at any moment. The sick thing is, I almost feel like a shutdown in Shanghai would pop the stock because it has been priced in.

Sentiment seems so bad that I’m starting to think even strong Q4 numbers won’t do anything, because investors will already be fretting about a China Q1 overhang and US recession at that point.

 

[dl003]

I don't understand it at all, it's relentless... some have posited that it's Delta-hedging MM's selling shares to cover vast numbers of puts being bought, I can't imagine a lot of folks selling down here unless they're being forced, so what it going on?

For my part, I just try to get to the end of the year without doing anything rash, keep my realised profits intact, but I'm going to go a bit more aggressive with selling calls, certainly as of January - as mentioned a while back, will do this with a limited number of contracts, 10, 15, 20, something like that, which will give an escape-path in case of a sudden reversal -> can either add more contracts to facilitate a roll, or just throw them up and out 3 months, but still have tons of shares unwritten against to continue the weeklies at a higher price-point...

160 is the last line of defense. It is where the 0.618 *all time* retracement and 200 WMA are.

At this point I guess anything is possible. 0.764 is next and only the worst of the worst end up there before bouncing.

160 has always been on my radar but it just seemed stupid TSLA would even go there with such strong financials and growth.

I guess 2 teaspoons of Elon's selling, a pinch of demand concerns and 3 quarts of excessive hedging can cause this stupid action.

 

[dl003]

In an attempt to make the best of a bad situation, I've been doing lots of tax loss harvesting, not by merely selling shares, but by replacing them with super duper ITM calls expiring in January & March. All in all, they've helped me reduce my taxable gain by like 60%. My real cost for these shares is in the $20 range but got bumped up to like $270 after a series of stupid transactions in 2020 and 2021. I switched my cost basis method to highest cost before selling the shares. Replaced them with 1..6 - 10C's exp early next year.

 

[CHGolferJim]

Crazy times.

• Rolled all current CC down and in: 25Nov-c$205 (+91% since Thursday) and 23Dec-c$220 (+78%) --> 2Dec-c$195
• Also sold several additional 2Dec-c$180 at $4.49.
• These are already up 24% to 33% today
• Just looking to squeeze out premiums the rest of the year and regain some capital in 2023; considering to switch 1/2 of shares in an IRA to Jan25 LEAPs

 

[OrthoSurg]

I missed the last 5 best days in TSLA to sell CCs.

I have been pumping money endlessly in my trading account in the last year to cover for TSLA going down and down.

I am getting tired of this.

If only I could stop looking at the SP for 1 year but no, I have to manage margin every time the stock goes down.

I can’t believe we are heading to -90% and shortzies will win

 

[ReddyLeaf]

…..snip……I now expect that the SP will test $150 like Artful Dodger said in the main thread (hedge fund payback for getting burned on the 1st stock split). Amazing insights. Thanks! I just wish that I figured that out months ago. Furthermore, I expect that the SP will remain suppressed by tax loss sales until January……

…..This drop if getting out of control….

I give up. This trading action is stupid…..

I don't think I have seen the stock so weak in a long time. Wow it's like brokers have disabled the buy button for TSLA……

I don't understand it at all, it's relentless... some have posited that it's Delta-hedging MM's selling shares to cover vast numbers of puts being bought, I can't imagine a lot of folks selling down here unless they're being forced, so what it going on?

If this keeps up by the time we have a third consecutive good ER TSLA will be a five dollar stock with a PE of 0.4.

Unfortunately, I think the Artful Dodger & MaxPlaid have the best interpretation of what’s happening to the stock. Massive put buying for December 150s. This shows up in other monthlies and weeklies, but not as obvious. Definitely targeting $150 by EOY. Contemplating rolling my CCs and straddles down even further tomorrow. Definitely sad.

 

[scubastevo80]

Opened some 150/135 BPS for Friday when we were down 5% today for about $0.26. Certainly jumped the gun a bit, but willing to bet the short week doesn't close us down another 10%... although I've been wrong before.

 

[vikings123]

Unfortunately, I think the Artful Dodger & MaxPlaid have the best interpretation of what’s happening to the stock. Massive put buying for December 150s. This shows up in other monthlies and weeklies, but not as obvious. Definitely targeting $150 by EOY. Contemplating rolling my CCs and straddles down even further tomorrow. Definitely sad.
View attachment 876917

IMO put buying cannot fully cause the stock to drop in this manner. I even saw a million dollar bet for Jan 23 123$ puts.

Now if somebody was liquidating their position put buying can absolutely cause additional selling from the MMs.

The real question is who is liquidating their positions at these levels and why?

 

[Xepa777]

If this keeps up by the time we have a third consecutive good ER TSLA will be a five dollar stock with a PE of 0.4.

I think almost everything we are seeing is about China right now. The market doesn't believe TSLA can close on the promises of 4Q and believes that a shutdown could come at any moment. The sick thing is, I almost feel like a shutdown in Shanghai would pop the stock because it has been priced in.

I think Tesla will underperform Q4 because a lot of the US orders are going to roll over to next year for the tax credit. It might get ugly, but the light at the end of the tunnel is Q1 should be spectacular once we have clarification on tax credits and "the wave" results in much higher YoY deliveries.

 

[JustMe]

IMO put buying cannot fully cause the stock to drop in this manner. I even saw a million dollar bet for Jan 23 123$ puts.

Now if somebody was liquidating their position put buying can absolutely cause additional selling from the MMs.

The real question is who is liquidating their positions at these levels and why?

Good question. One possibility is that it’s related to collapse of cryptocurrencies, resulting in margin calls. Bitcoin dropped under 16k today.

TSLA has been pushed around dramatically due to heavy options buying but as you point out this is a whole nother level.

 

[BornToFly]

I'm torn about what to do next. Thinking out loud....

Margin calculator says I'm good to SP 120 (but I don't fully trust it, and I'm scared lower could actually happen).
If we are going below 150, I would rather sell some here and buy lower. However I don't want to sell and then see a quick 20% gain in the SP before I buy back in.

So one option is do another set of 50X protective puts funded by selling covered calls. If the SP doesn't move, I would be looking at something like +165P/-170C tomorrow.
The problem is I would then have 100X total CC for next week split between 170 and 175. I would have another 150 calls I could write to help roll these up and out, but then I run out of power to do it again.

The other option is sell 5,000 shares (or 10,000) at the open and hope there is a little drop so I can place a buy stop-loss order in at my sale price. However, if there is no drop, just a $2 move up would result in a $20,000 loss on 10,000 shares....

I'm actually leaning toward the selling the shares option as that could be less dangerous if the SP doesn't keep dropping....

(Selling 2025 CC doesn't generate enough income at a strike that I could live with in 2025).

 

[vikings123]

Good question. One possibility is that it’s related to collapse of cryptocurrencies, resulting in margin calls. Bitcoin dropped under 16k today.

TSLA has been pushed around dramatically due to heavy options buying but as you point out this is a whole nother level.

I hope you are right. On the flip side the action we saw today was a slow walk down which makes me think this is MMs playing games until some actual buyers show up.

Or this could be Elon again. He has definitely trained us to expect the unexpected. Nothing would surprise me anymore, hopefully the fundamentals are still strong and the China demand issue is a temporary one.

 

[elasalle]

FOMC mins Wed 2pm.

TSLA oversold ...

 

[OrthoSurg]

FOMC mins Wed 2pm.

TSLA oversold ...

I closed QQQ and PYPL puts I sold 2 months ago for a profit and free up 1% more margin

I have 200k laying in an account I was expecting to invest in a telemedecine company final round pre-IPO but I might have to use that cash to back up my TSLa margin again.

FFS. All the money I make at work goes in my trading account. This crypto crash making people liquidate all their TSLA, Elon front runners sellers, I am not sure if I misclicked NKLA when I bought my last shares. I understand NKLA going down 95% from ATH but the company with the fastest growth and best margin in the world fastest expanding market? Cmon, also going down to $40? If I retired last year like I almost did to trade full time I’d be shitting my pants right now. I don’t know how you guys manage this drop without going crazy. I did so many knee and hip replacements since Wednesday and fixed fractures on call during the evening and this week end I didn’t even have the time to think about the stock market but the drop today is making me batshit crazy.

My wife told me to start closing puts 1 by one to free up some margin every time the stock drop but FFS, till where are we going in that endless well of gloom and doom. I understand market corrections are healthy but destroying everyone’s life savings so they stop spending was not something I read in my health books.

**** this market

 

[JustMe]

Hell yes I can relate. This is really unsettling- like there is no bottom. But there is - and we ought to be close. This stock is way oversold. Just need some good news to settle some nerves.

Well.. fwiw futures are a tad green

 

[dl003]

I hope this doesn't stray too far from the purpose of this thread. NFLX has a clean setup for shorting OTM calls as it already finished the first leg up from the low. Note how NFLX only bounced after touching the 0.764 retracement from ATH. If this was TSLA, we'd be looking at ~ 100.

Once the red 5 wave sequence was completed, NFLX went on and formed an expanded flat correction in green. Wave B ended slightly higher than the start of wave A while a double bearish divergence developed on the daily timeframe. Divergence of this magnitude warrants a very steep drop. Coupled with the requirement of green ABC to retrace at least 50% of red 12345, we're looking at 235 as the minimum target and anything over 317 for a safe strike for call shorting.

For entry: looks like it already completed the first leg down of green wave C. Double bullish divergence on a 30m timeframe, good for a 1-2 day bounce, targeting the 0.5 retracement @ 297.5 at the minimum. Opening your short calls here would be good. However, if it was me, I'd wait for 0.618 @ 301 unless it loses most of the steam @ 297.5. If it can get over 306.27 I'd cut the loss and see how things develops. BONUS: If TSLA bounces huge with NFLX and NFLX gets over 306.27, I'd cut the loss on NFLX and short a naked TSLA call for the same amount of premium or just enough to make up for the loss. Hard to lose here. Notice the 200 DMA @ 291. If NFLX can close the day solidly over 291 I'll close the short as well.

High reward & low risk play: at 297.5 or 301, depending on the price action, buy 245/235 put spread & sell naked 420C expiring January 20, 2023. You should be able to get a small credit back. NFLX has very little chance of hitting 420 by then. High chance of hitting 235.

Obviously, please don't go heavy on these setups. Although I have very high confidence in them, only use them to partially replace lost or reduced income from TSLA going too low.

 

[Max Plaid]

I closed QQQ and PYPL puts I sold 2 months ago for a profit and free up 1% more margin

I have 200k laying in an account I was expecting to invest in a telemedecine company final round pre-IPO but I might have to use that cash to back up my TSLa margin again.

FFS. All the money I make at work goes in my trading account. This crypto crash making people liquidate all their TSLA, Elon front runners sellers, I am not sure if I misclicked NKLA when I bought my last shares. I understand NKLA going down 95% from ATH but the company with the fastest growth and best margin in the world fastest expanding market? Cmon, also going down to $40? If I retired last year like I almost did to trade full time I’d be shitting my pants right now. I don’t know how you guys manage this drop without going crazy. I did so many knee and hip replacements since Wednesday and fixed fractures on call during the evening and this week end I didn’t even have the time to think about the stock market but the drop today is making me batshit crazy.

My wife told me to start closing puts 1 by one to free up some margin every time the stock drop but FFS, till where are we going in that endless well of gloom and doom. I understand market corrections are healthy but destroying everyone’s life savings so they stop spending was not something I read in my health books.

**** this market

Not crazy, probably because I don't use margin, but chronic stress 24/7, that's for sure

I see no point selling shares at a loss down here, I'd rather sell some ITM calls and chance my luck with that

 

[SebastienBonny]

Some positive news driving the SP premarket now, but we'll have to see what today brings.
Planning on selling a CC for next week and selling one extra next week should the first one need management.

 

[BornToFly]

Tesla on pace to almost double the previous China record for the first two months of a quarter. I'm sure this will be replaced by - Tesla still losing to BYD, and the SP will continue to drop for no reason....