Wiki Selling TSLA Options - Be the House

[ReddyLeaf]

Lots of OI this week, much more than usual, close to Dec monthly numbers. Seems 180-185 is the target. Also, looks like IV is higher this week, so probably anticipation of the Semi delivery announcement. Guessing there will be an IV crush on Friday.

Some interesting Dec c173.33s traded today. If anyone can find the trade it would be nice to see if this is a close out or more opened. If closed out, which is my guess, then Dec is very very put dominated.

The SP is hovering at a seeming 2-yr low, probably for a reason, such as a big stare down, waiting to see who flinches first. I’m sitting this week out, just watching the lack of action with relaxed relief.

 

[Yoona]

Lots of OI this week, much more than usual, close to Dec monthly numbers. Seems 180-185 is the target. Also, looks like IV is higher this week, so probably anticipation of the Semi delivery announcement. Guessing there will be an IV crush on Friday.

Some interesting Dec c173.33s traded today. If anyone can find the trade it would be nice to see if this is a close out or more opened. If closed out, which is my guess, then Dec is very very put dominated.

The SP is hovering at a seeming 2-yr low, probably for a reason, such as a big stare down, waiting to see who flinches first. I’m sitting this week out, just watching the lack of action with relaxed relief.



View attachment 879459View attachment 879462

red=at bid or below
green=at ask or above
yellow=between bid/ask

 

[EVNow]

Current Plan
Sell Covered Calls on the 5,800 shares while waiting out the famine. Locate 2-3 resistance levels above current share price and choose a weekly strike slightly above that (for instance 12/2 202.50, which is about 15-20 delta; 80-85% chance OTM) and sell 58x contracts (was selling for around $6-8k today), rinse and repeat every week (even scalp/BTC on dips along the way when possible) = around $15k/mo.

-Is this realistic?

I've a similar situation ... except for one big difference. No Margin, No Debt. My shares in my Trad IRA have a basis of around $260 and Investment around $340.

I've been selling covered calls / puts for a couple of years now. Its a bad strategy. As I wrote previously, with Tesla, "black swan" events happen very regularly.

I've been considering vertical spreads instead of covered calls. That way you can hedge against bull runs. I wish I had done this with my cash covered puts too - my CB would have been much lower.

I've done a lot of backtesting / research using Black-Scholes spreadsheet. I'll post that with details today. Take a look at my post from a couple of days back.

Wiki - Selling TSLA Options - Be the House

ps : Purely in terms of premiums, I've been selling calls about 10% OTM for about 50 cents, since IV has been rather low recently (except this week). That will give you about 10k per month for 58 contracts. But the issue is once in a while the SP will shoot up wiping out your profits.

 

[SebastienBonny]

Does anyone know when options post jan/25 will be available?
Is there a predefined schedule?

 

[intelligator]

I rolled 12/2 177.5cc to 185 same expiry keeping enough credit to pay margin interest . Once these expire, not sure if I want to open more CC or BPS. Outside of my reserve that I want for emergency, I can't readily write CSP. Maybe sitting out the rest of this week is the safe choice.

9:30AM to 3:00PM - Options Volume where contracts > 500

 

[Yoona]

https://twitter.com/x/status/1597678628879630337

 

[traxila]

I've a similar situation ... except for one big difference. No Margin, No Debt. My shares in my Trad IRA have a basis of around $260 and Investment around $340.

I've been selling covered calls / puts for a couple of years now. Its a bad strategy. As I wrote previously, with Tesla, "black swan" events happen very regularly.

I've been considering vertical spreads instead of covered calls. That way you can hedge against bull runs. I wish I had done this with my cash covered puts too - my CB would have been much lower.

I've done a lot of backtesting / research using Black-Scholes spreadsheet. I'll post that with details today. Take a look at my post from a couple of days back.

Wiki - Selling TSLA Options - Be the House

ps : Purely in terms of premiums, I've been selling calls about 10% OTM for about 50 cents, since IV has been rather low recently (except this week). That will give you about 10k per month for 58 contracts. But the issue is once in a while the SP will shoot up wiping out your profits.

It all depends on what type of return you are looking for. Personally, I settled on a 'free' return.

It was on this fine board that I discovered that TSLA has never exceeded a 20% upward move from Monday to Friday.

And so I have been getting 'free' money. It is not that much on a percentage basis, but many people in this world would be happy with it.

Lately I have been playing a bit with it by moving out one or two weeks but moving up to 30% or 35% trying to catch some theta before it decays. It is working out OK.

If the feared skyrocketing SP appears, I will deal with it. Helluva lot better than I have been dealing with these past ten months.

 

[adiggs]

https://twitter.com/x/status/1597678628879630337

What does this mean to you, if anything?

 

[BornToFly]

Note to self - TSLA destroying the ’No China Demand’ story with 170% of previous record sales is REALLY bad for TSLA, but great for NIO, RIVN, F, and GM.

 

[jim0266]

It all depends on what type of return you are looking for. Personally, I settled on a 'free' return.

It was on this fine board that I discovered that TSLA has never exceeded a 20% upward move from Monday to Friday.

And so I have been getting 'free' money. It is not that much on a percentage basis, but many people in this world would be happy with it.

Lately I have been playing a bit with it by moving out one or two weeks but moving up to 30% or 35% trying to catch some theta before it decays. It is working out OK.

If the feared skyrocketing SP appears, I will deal with it. Helluva lot better than I have been dealing with these past ten months.

I used to track the stock but haven't for a while. Attached are screen shots showing the weekly moves of 20% or more for the week, filtered as if you had sold the CC at the open, HOD, LOD or at the close for the first trading day of the week. The only time in 2022 we had than a 20% rise in a week was 3/18/22 if you had been unlucky enough to sell your call a the low of the day. At the right in each screenshot of any news I could find that might have been the reason for the SP movement. HTH.

 

[Yoona]

What does this mean to you, if anything?

personally, seems slightly bullish heading into yearend but stuck ~200

What is the Options Heat Map?

An explanation of what the Options Heat Map is and how it can be used.

help.quantdata.us

 

[Jim Holder]

with a chance of TSLA buyback (black swan), i ALWAYS have a trailing stop BTC order

• protect gains (small is better than none)
• reduce danger of catastrophic loss
• automated close in case of large macro move and i am away
• may leave money on table, but opportunity loss is not really money lost

Nice! Trailing-stop sounds like a good safety mechanism. How do you choose the stop and do you do it for all contracts in that CC or only a few?

An example would be most appreciated!

 

[traxila]

I used to track the stock but haven't for a while. Attached are screen shots showing the weekly moves of 20% or more for the week, filtered as if you had sold the CC at the open, HOD, LOD or at the close for the first trading day of the week. The only time in 2022 we had than a 20% rise in a week was 3/18/22 if you had been unlucky enough to sell your call a the low of the day. At the right in each screenshot of any news I could find that might have been the reason for the SP movement. HTH.

Excellent post! Thanks!

I usually try to time the CC with a move up, however small it might be. Lately it has been like beating a dead horse - just sell the CC it does not matter. It is precisely this and the dwindling IV that lures you into selling CCs closer and closer to the SP. DO NOT CAPITULATE! TSLA will very probably start exploding upwards at some point, and you will be happy you kept your distance.

Wish I hadn't messed around with selling non-cash secured puts, though. Having eight figures in margin can certainly give you a false sense of security that you are being conservative. I can attest that the eight figures are now six and at times would have been zero save for my furious scrambling. Sigh...

 

[Yoona]

Nice! Trailing-stop sounds like a good safety mechanism. How do you choose the stop and do you do it for all contracts in that CC or only a few?

An example would be most appreciated!

for ex, i have 12/2 -c200 that is +76% with trailing stop 50%

CC is happy if sp falls but if the prem rises up 50% from today's bottom, instant close... if latest prem (not opening prem) is $1 and moves to $1.50, auto BTC

obviously, TSLA's large swings may accidentally close the CC and that's ok (never regret pocketing loose change is an important mindset)

trailing stop loss is only for shares that i care about or have high cost basis... for buy-writes i don't bother since i intentionally ITM them

 

[intelligator]

Monday and Tuesday were looking up, slight pushdown today, put side grew legs at 180 and adjacent strikes. 200c retracted some, call side remains much the same from Tuesday.

 

[EVNow]

It was on this fine board that I discovered that TSLA has never exceeded a 20% upward move from Monday to Friday.

Lately I have been playing a bit with it by moving out one or two weeks but moving up to 30% or 35% trying to catch some theta before it decays. It is working out OK.

How about Friday to Friday ?

Anyway, 20% OTM may be ok. I’ve been trading 10%.

I’ve to say 20% OTM premium can be very small … sometimes so small I don’t care much

BTW, for the premium you get at 20% OTM, you may be able to do a properly hedged 10% OTM spread ….

 

[Yoona]

How about Friday to Friday ?

Anyway, 20% OTM may be ok. I’ve been trading 10%.

I’ve to say 20% OTM premium can be very small … sometimes so small I don’t care much

BTW, for the premium you get at 20% OTM, you may be able to do a properly hedged 10% OTM spread ….

TSLA : How Far is Friday's Close vs. Prev Friday's Open (7 DTE)? - History

20% OTM is probably safe?

 

[EVNow]

TSLA : How Far is Friday's Close vs. Prev Friday's Open (7 DTE)? - History

20% OTM is probably safe?

View attachment 879630

I've been selling 10% OTM and haven't got badly caught (unlike 10% cash covered puts) - probably because I don't trade near EAs. I'm getting jittery because we are near 2 year lows.

BTW, how are you getting all these cool graphs ?

ps : I've to note one more thing. Its difficult to, obviously, stick to trading close of day. If we happen to pick the wrong time to trade .... it could be worse.

 

[dl003]

Ever since after June 2019, all first spikes from a major low in TSLA have taken 7 days or less to reach its peak. Today is the 5th day and already it is rolling over so it's safe to say we're going to be consolidating for the next week.

Once a peak has been reached, the consolidation should take an equal amount of time or (most of the time) longer, which means CCs above 190 should be safe for 9/9. As for me I'm gonna keep sticking to 200s next week. At this stage the signal to cut your loss will be extremely simple: if TSLA can get higher than 187 before 177 then something else is going on.

 

[Yoona]

Top 50 TSLA IntraWeek Drops and Stock Price Growth 4-8 Weeks Later

if there is a big crash intraweek, 66-76% probability sp is up/higher 4-8 weeks later