Wiki Selling TSLA Options - Be the House

[Max Plaid]

Do I sell CCs for next Friday now or I wait?

Who knows... but better to sell them now that yesterday or at open today... is today a random dead-cat bounce, small relief-rally, start od a bear-market rally, start of a Santa-rally, start of a true bull-market, bull-trap... I have zero clue

Whether to sell now depends on your exact circumstances, I can only speak for myself: I have 15x -c185 that I'm OK to allow exercise, I have 25x -c190 straddling puts with so much premium baked-in that the if the SPO>170<210 I profit, and I'm looking to sell some beer-money -c202.5's for $1.1 as a) I think 200 will be psychologically difficult to pass b) 203 has been resistance for quote a while c) 202.5's would be easy to roll, probably

So yes, I maybe will have 50x cc in play for next week, but there's some monkey-brain reason behind them, and I still have the possibility to write 70x more contracts to facilitate rolls, if I want

Edit: STO 10x 12/16 -c202.5 @$1.1

 

[BornToFly]

So it worked this time.

I think this is one of the issues with rolling if SP touches the strike price. I rolled my P175 .... now I'll roll182.5/187.5 for small credit. If I had just waited at least one of them would have expired worthless

Yep, a few days ago I rolled a 175P for this week to 170 for next week. It would have been gone if I had waited. But if they get too far ITM they become a problem....

 

[ice]

Bank of Canada hiked interest rates again by 0.5%, the interest rate is getting ridiculous on some of my lines (almost 10%). Decided instead of just buying time selling CCs to pay for margin interest and just tread water (and more work to file taxes), just sold some additional chairs to raise cash at $172.31. Now I'm margin safe to $43/share, and if I inject outside lines can ride it to $0/share. Guess I will have fun stay poor with the permanent chair losses if I don't manage to buy them back somehow. It's really hard to sell CC and make 30% annually (margin interest + capital gain taxes) so this sucks but I'm trying to cut down my margin balance further instead of paying 10% interest while having paper losses which is double the pain.. In a way i make myself feel better by pretending I'm depositing cash to get 9.5% interest...lol. Guess this is capitulation for me, probably the bottom.

Going to make TSLA go even higher. I just need maybe 1 more contract exercised and I'll be completely out of margin. I'll have fun stay poor. As it stands I have only 42% of my peak # of chairs. and the value of those chairs declined as a double hit. My margin account currently has a massive loss because of the leverage (non margin one fared much better), I have to protect what I do have left and sacrifice future gains.

Interestingly elon talked about margin yesterday. Musk says wise to avoid margin loans during macroeconomic risks

STO 12/16 -185c $5.45, SP around $181.93

Positions: 12/9 -200c ($3.39 premium) 12/16 -185c ($5.45 premium) 12/16 -210c ($2.62 premium) 1/20/2023 -175c ($14.65 premium)

 

[Cherry Wine]

This is likely helping to buoy markets today:

 

[Yoona]

Double Top detected at yesterday's 2.414 fib extension, perhaps that's it for today?

edit: EMA 13 (bottom of green cloud) providing supp since today's Open

edit: today's High 182.50 takes out 2 call walls (180, 182.50) and then perhaps MM will close <180 ?

 

[OrthoSurg]

Double Top detected at yesterday's 2.414 fib extension, perhaps that's it for today?

View attachment 883109

Sold back 700 shares
Sold 7x -p430 17/01/2025

This is my final stand

Sold 80 CCs at 190 for 16/12/2022 for 3.50

Make me roll these CCs please

 

[EVNow]

As I’ve shared earlier, I’m sitting on 5,800 TSLA shares with an overall CB of around $309, with 1,900 of them CB $243 from a 12/16 $266.66 CSP that was put to me recently. This ran up my margin (TD Ameritrade 6% int.) too close for comfort, requiring puts to keep me afloat until SP recovers.

Instead of taking a $120k loss and cutting loose the 1,900 shares ($242 CB) @ current prices, I’m thinking of holding onto them, hunkering down for the duration of the storm (until TSLA back at 250-300 or higher) and carry the interest ($2.8k/mo) and 58x **SUGAR** TSLA 100 puts (around $550/mo) to protect my PNR by selling conservative CC’s along the way.

I think you asked this question earlier ... ? Anyway, sell LEAPS to cover the interest cost ? That way you don't have to manage this weekly and potentially you can sells leaps above your avg buy price. Similarly for your CSP .... move to a father date ... ?

I haven’t been though a heavy bear market/recession as a trader yet, wondering if those of you who have can shed some light.

Considering this added to China FUD, Tesla held 170 quite well today ...

The last "bear market" in '18/'19 nearly wiped out a lot of us. It was mostly a TSLA issue rather than market as a whole, though. For every bad news about Tesla, we came up with a convenient excuse. Obviously they were all FUD and promoted by TSLAQ. We kept loading up with calls ... afterall $1 call was so much better than $5 call.

But it turned out TSLA was indeed in trouble. The deliveries plunged (~60k for Q1 '19) and had half a billion quarterly loss. Now we also know Elon was trying to sell Tesla to Apple at that time, but Tim wouldn't take the call. Distractors, it turned out were more right than we were.

We don't know what exact pieces of China news now are fud and what are correct. But there is enough news and corroborating data to suggest a major softening of demand in China. Esp. given that the subsidies are ending this month .... what does next year hold for China ?

https://twitter.com/x/status/1601075815927554048

https://twitter.com/x/status/1600945923898556417

 

[ReddyLeaf]

Double Top detected at yesterday's 2.414 fib extension, perhaps that's it for today?

edit: EMA 13 (bottom of green cloud) providing supp since today's Open

edit: today's High 182.50 takes out 2 call walls (180, 182.50) and then perhaps MM will close <180 ?

Wow. I really want that crystal ball of yours. MMs dropped the SP as you were posting. Hmmmmmm, who are you really?

 

[adiggs]

Yep, a few days ago I rolled a 175P for this week to 170 for next week. It would have been gone if I had waited. But if they get too far ITM they become a problem....

I divvied my same-same problem up this week. The bulk of the 175s (and 170s) bps I had for this week I let ride, even when shares were 170ish a couple of days ago. Really unexcited then about that situation but there was still so much time value in the position, plus so little available downside (my read and action on the situation) that I let them go.

Also because I have had 2 same-same situations in the last month. But I did go ahead and roll some of the 175/160 bps to next week. Today the ones I didn't roll are all going for 95%+ gains despite spending part of the week at 2x+ losses, while the rolled position will be open next week. And I won't be surprised if it goes ITM next week (actually kind of hoping these get close to ITM next week, as that'll be a buying opportunity for shares or Jan '25 calls).


not-advice
Something of a side note - I started thinking a month or so back, and continue to think, that this is a particularly good time to be selling BPS. My simplistic rationale is that the share price is at the low end of its price range leaving us with a limited range to move down. I could maybe see $120 in a really extreme downward move (about $60). This would be something akin to a wider and general economic meltdown. Meanwhile $240 or +$60 feels like it could happen in a week, any week.

Even if I do %s - $120 is down 33%. The reverse is +50% or $270. I'm a lot more worried about calls being caught out on a fast move to $270 than I am puts being caught out during a slow steady slide to $120 (the two bigger pictures scenarios I consider unlikely, but not unreasonable).

This relationship flips if the share price were $380 at this moment.

In line with this view of things, although I don't like opening BPS on an up day, my previous 175s and 170s were opened with the shares around 185. So the momentary share price around 179-181 is still low in more absolute terms. I'm opening up new BPS for next week of the 170/155 variety (2.45 credit). Because of the size of the credit I'm doing a 1/2sized position, and holding the other half to open next week

I probably should have done 165/150 for a ~$1.50 credit. A 2/3rds gain on this alternative position would net $1/share; a high to overly aggressive return for what I'm looking for. The position I did open might pay to buy out a few losing csp's.

Then again - I also believe that if I'm seeking say $100k in annual income, then I should be making weekly trades that can reasonably produce $4k (maybe even a bit more) in a week. If every single week worked out then of course I'd go way over my target. Planning to have every week be a winning trade doesn't sound like a winning strategy to me.

 

[adiggs]

Heads up - I believe this affects anybody with a US retirement account with limited margin - its definitely affected me at Fidelity. I did a trade sequence around this expiration that worked out really well in terms of profitability, but has left me stuck with a 90 day cooldown before I can do any of these trades at all.

I opened a 175/160 BPS late last week for this week expiration. The short leg dropped pretty quickly and I closed it on the same day for a .27 gain or so, figuring that it was long enough to this week expiration that I would get to reopen. I was right and reopened for 1.43 - Monday I think it was. Today I was finally able to close the short leg for .07 (1.36 gain) with the long leg expiring later today valueless.

Sounds great.

Problem is that when I closed the short leg and then reopened it I triggered a day trading limit, partly from the day trade (open and close same day, open replacement next day), partly from a day trade limit on position size, and partly because legging out of and back into the spread changed how margin was calculated along the way.


I've now got a 90 day restriction on the account that I know will stop any spread trades using limited margin - I haven't tried cash reserved spreads, but will undoubtedly do so next week the next time I have a good open and a day or 2 for trades to settle has passed.

Whether the cash based trades work in the account or not, this restriction is a minor deal for me as I'm doing the paperwork to move the account to Tastyworks regardless. This same trade sequence at Tastyworks would carry a $30 total premium ($10 for the >10 contract long put, $10 for the >10 contract short put, $0 to close the >10 contracts short put, $10 to open (and then close) the short put a second time). $30 total premium versus the (max $130 open long put, $130 open short put, $130 close short put, $130 open short put, $0 close short put as price was <$0.65 at close) or $520 (at most - actually less, but I am tradeing >10 contracts) that Fidelity collected.

I've heard good things about the Tastyworks interface. If its a wash then my accounts are on the move.

 

[vikings123]

Reminder that the CPI release is on Monday, so you won't get an opportunity next week to position yourself around it.

Good point. Prior to that though I'm sure we will see a different version of the production cut news . I mean come on how many times did they pull the stock down this week on the same news.

Anyway, glad to see Tesla bouncing back. I'm in the camp that thinks this is a dead cat bounce. But the volume this week has been impressive. Maybe from all the put buying and selling?

edit: As corrected by @UltradoomY CPI release is on Tuesday. I feel like Monday will be a lot of sideways action so might not be a bad idea to use the weekend Theta to our advantage by selling calls.

 

[adiggs]

not-advice
Something of a side note - I started thinking a month or so back, and continue to think, that this is a particularly good time to be selling BPS. My simplistic rationale is that the share price is at the low end of its price range leaving us with a limited range to move down. I could maybe see $120 in a really extreme downward move (about $60). This would be something akin to a wider and general economic meltdown. Meanwhile $240 or +$60 feels like it could happen in a week, any week.

more not-advice
Wanted to add to this - part of my rationale is supported by a year ago August. Share price was relatively low, relatively stagnant, with relatively low IV. That was comfortably my single best month in more than 2 years of selling options. Roughly 6x my high end monthly target - really good.

It was primarily that the share price was close to as low as it had been; high 600s / low 700s (200 - 233 in today's money). I used that to sell a lot of 700 strike bps and then 730 strike bps, week after week, all of them winning. Still selling those 730s when shares were 760+. Good times

We'll see how this goes for me right now - it IS what I'm acting on (thus the 170/155s already opened for next week despite today being an up day).

 

[Cherry Wine]

False - it is Tuesday the 13th - 8:30 am before markets open

Hah…was looking at 2023. Thanks! Deleted my post.

 

[adiggs]

A question for portfolio margin users, especially those with experience using a highly concentrated account (TSLA, TSLA options, cash) - is there any reason -NOT- to do portfolio margin assuming a large enough account that the minimum equity requirement isn't an issue? I ask because Tastyworks has pm available assuming $150k minimum equity is always maintained. I'm well above that.

From what I can tell there's no reason not to take pm vs. the more typical Reg-T. Even if I don't go anywhere close to the leverage levels PM enables vs. Reg-T. My typical leverage level is to treat shares as fully owned, and csp or put spreads as fully cash backed. In practice that means all of my account is covered using margin from shares, and the cash is on deposit and doing nothing (though that isn't how I arrange things mentally).

 

[Jim Holder]

A question for portfolio margin users, especially those with experience using a highly concentrated account (TSLA, TSLA options, cash) - is there any reason -NOT- to do portfolio margin assuming a large enough account that the minimum equity requirement isn't an issue? I ask because Tastyworks has pm available assuming $150k minimum equity is always maintained. I'm well above that.

From what I can tell there's no reason not to take pm vs. the more typical Reg-T. Even if I don't go anywhere close to the leverage levels PM enables vs. Reg-T. My typical leverage level is to treat shares as fully owned, and csp or put spreads as fully cash backed. In practice that means all of my account is covered using margin from shares, and the cash is on deposit and doing nothing (though that isn't how I arrange things mentally).

I can share what know. I’m with TD Ameritrade and by being 99.999% concentrated on TSLA (5,800 chairs at $309 CB) they set my account in such a way that the margin requirements are lower (40% vs 50%) due to the concentration. It really helped me avoid a maintenance call when TSLA visited the $160s recently. It basically as a nice chunk of cushion for long holders looking to ride out the down seasons such as we are in now.

I was also able to negotiate margin interest down from 9% interest to 6%, and options contracts from 0.65 to 0.50 per contract (although I hear that is fairly common for options at TD if you ask nicely).

 

[adiggs]

I can share what know. I’m with TD Ameritrade and by being 99.999% concentrated on TSLA (5,800 chairs at $309 CB) they set my account in such a way that the margin requirements are lower (40% vs 50%) due to the concentration. It really helped me avoid a maintenance call when TSLA visited the $160s recently. It basically as a nice chunk of cushion for long holders looking to ride out the down seasons such as we are in now.

I was also able to negotiate margin interest down from 9% interest to 6%, and options contracts from 0.65 to 0.50 per contract (although I hear that is fairly common for options at TD if you ask nicely).

I believe that on PM you also gain the ability to buy cheap shitputs to further / better manage your margin requirements and margin calls.

Pretty sure I can negotiate my Fidelity options commissions down to .50 as well. However a 200 contract spread costs $100 on each leg to enter and $100 on the long leg to exit, assuming that the short leg is exited at .65 or lower. Otherwise its $100 both legs, both ways. Tastyworks costs $1 to enter, $0 to enter, with a cap of $10 on a leg. $20 vs. $300-400; I'm not bothering with negotiating a lower commission with Fidelity, at least not yet.

I'll get an account moved and see whether the interface is an impediment. As long as its neutral vs. Fidelity, and I expect it to be significantly better, then I'm on the move with the new year..

 

[Jim Holder]

I believe that on PM you also gain the ability to buy cheap shitputs to further / better manage your margin requirements and margin calls.

Pretty sure I can negotiate my Fidelity options commissions down to .50 as well. However a 200 contract spread costs $100 on each leg to enter and $100 on the long leg to exit, assuming that the short leg is exited at .65 or lower. Otherwise its $100 both legs, both ways. Tastyworks costs $1 to enter, $0 to enter, with a cap of $10 on a leg. $20 vs. $300-400; I'm not bothering with negotiating a lower commission with Fidelity, at least not yet.

I'll get an account moved and see whether the interface is an impediment. As long as its neutral vs. Fidelity, and I expect it to be significantly better, then I'm on the move with the new year..

Good point about the *SUGAR* puts. They are keeping my account from blowing up (I must always keep 58x 100 puts (avg. price $0.07-0.10 ea if bought during spikes).

Interestingly anything less than 100 strike put, even 95 and even doubling the number (i.e., 116x95 puts) doesn’t help. 100 is the magic number for some reason. (I use the analyze tab in TOS along with price slices to run scenarios.))

 

[dc_h]

Well, this weeks 180 and 185's are closed and now (if Elon is listening), I have 190, 200 and 205 calls. If inflation comes in at .2, there's a good chance I'll have to roll them out. I can sell another 25 calls on Tuesday after the numbers come out.

 

[Yoona]

edit: today's High 182.50 takes out 2 call walls (180, 182.50) and then perhaps MM will close <180 ?

177.12 holding supp last 5 weeks (100% fib)

on weekly chart, 5 consecutive 177.12 supp

 

[EVNow]

Closed out 182.5/187.5 and 195/200 call spreads. Sold 200/205 call spreads for 40 cents.