Wiki Selling TSLA Options - Be the House

[CHGolferJim]

I see what you mean. It’s mainly for bookkeeping purposes so I don’t have to remember my prior year loss.

The real point I was trying to make, Mike, is that as long as you’re in a loss limit position already for 2022 (which I thought you were saying in the first post), it doesn’t matter whether you do more of these transactions in December or in Jan/Feb, the tax benefit happens at the same time.

 

[saniflash]

I think you should able to write calls under the strikes.

you can do that, but you'll need margin or cash to cover the difference between the lower short strike and the higher long strike. E.g., if you have $200 long call and a $150 short call, you'll need 100 x 50 = $5000 in margin/cash, and you need to be prepared to lose this money should the short call be assigned

 

[OrthoSurg]

Missed the opportunity to sell CC before the never ending MMD. Opened 12/23 -130p/+135p earlier for .8 , now waiting for the reversal.

When is the reversal happening? Before 2024 I hope. This is an endless soul crushing falling knife. Do I have to close all my naked puts now before we go to $80? Has Tesla stopped producing cars like Peloton stopped producing bicycles?
Was there any change to the company fundamentals? Was the TSLA stock price higher than other automakers combined because of the Elon Aura effect and he destroyed it on Twitter? I don’t understand what is going on.

 

[traxila]

95% of the general public does not know more than two or three things about Tesla. The three things they know are that they lose money (false), the competition is coming (false) and that you will be stranded on a long drive due to no chargers available (false).

The same applies to 75% of the investing public. Many of them were buying TSLA because it was going up. Now they are selling it as it goes down. Why? See above as to what they know about Tesla.

Of the 25% of the investing public that has a clue and has embraced Tesla and the 'mission' to varying degrees, a significant percentage of them have decided they are 'angry' by EM's 'antics' and have suddenly good reason to sell, because they are mostly regular investors, and that's what regular investors do, they sell at lows.

Combine this with an awful FED inspired bear market, TSLA specific FUD at all time highs, China economy in the dumps and some spectacularly aggressive bear raids and here we are. Oh, lest I forget to mention, there was some timely selling by EM that contributed to the SP fall on at least some level, especially considering the timing of the last one. Would that he could have spared us that at least! I know he would have preferred not to sell, but he is not the type to dwell too much on this sort of thing, especially when he knows that Tesla have never been more bulletproof as a company and its current and future dominance has never been more assured, current demand hiccups, real or imagined, aside.

21 billion in the bank and the proceeds and profits of the current record quarter, even slightly muted as they may be, will certainly allow Tesla to navigate the next year without issue. In the meantime, I believe they will continue to expand production, sell more cars AND, in case anyone missed it, execute on a HUGE RAMP in Megapacks and battery storage overall.

I am sorry for all the pain on this board. I have witnessed good people with unimaginable returns severely hurt or wiped out completely due to use of margin and derivatives. I have been hurt badly as well, although I seem to have taken on less risk overall and was willing to take hits to deleverage about 50 points ago. My margin account is still here due to this, but I cannot make it past 80 as I currently stand. Is that a possibility?

4Q 2022 is a huge determinant. If it is as great as it appears, I cannot see TSLA going below 100. That is an incredibly pessimistic take, BTW. But pessimism rules now, and is discounted at your peril.

I came here for electric cars, and I have been rewarded gloriously. I can see a world coming now where every car is a BEV with few exceptions. I may live to see the complete revolution. I have a good shot at another 20 years, so the statistics tell me. Whatever happens from here, I am victorious! I hope you all are as well, in the better than ever hopes for the reality of an electric and renewable future.

All the best! Health and Happiness in the Holiday season and for the New Year!

 

[CHGolferJim]

Alex succinctly nails it AFAIK.

Now thinking we are likely to continue to trail down for the remainder of the window dressing and tax loss harvesting period (so another 10 days at the latest), then a reset begins in January. Extent depends on P&D, tangible details of China sales and Berlin/Austin production, the general January effect, 4Q ER, etc.

 

[kabin]

I was planning to nibble more at 140 but will hold off for a bit. These SP drops seem to have some near term conviction.

 

[bingoz]

I guess margin calls is probably another reason of the ridiculous drops lately. We have seen many early assignments here, and I guess it's happening out there with the big hands too.

 

[Jim Holder]

When is the reversal happening? Before 2024 I hope. This is an endless soul crushing falling knife. Do I have to close all my naked puts now before we go to $80? Has Tesla stopped producing cars like Peloton stopped producing bicycles?
Was there any change to the company fundamentals? Was the TSLA stock price higher than other automakers combined because of the Elon Aura effect and he destroyed it on Twitter? I don’t understand what is going on.

Seems like it might have been in an overvalued bubble due to Elon Aura etc. and Elon getting political and the Twitter debacle was the spark that popped it. Many are saying TSLA fair value is around $60-$80, not sure how accurate that is but it’s starting to feel that way and those of us waiting for the SP to get back to even just 250 might have to wait quite a while.

Here’s an example worth a watch posted today, if only to hear that opinion, though I don’t know what y’all think about Paul:

 

[Max Plaid]

Well, we hit the Chicken Bottom @$140, which also happens to be $420 pre-split, can we go up now?

I'm once again thinking to sell half my shares DITM to protect the downside, maybe 60x -c120's, can always roll them up and out

And there you go, $138.85, but bounced hard back above 140, must have been a pile of buy orders waiting

 

[strago13]

We're closing < $140 today, the selling pressure is relentless.

I am completely defeated here. I dont understand how a companies stock has lost > 50% of its value in less than 3 months. The only negative news is really the "miss" in Q3, Elon selling and the Twitter purchase. The Q3 delivery miss is somewhat related to the fundamentals of the company, but certainly not 50%. So I can rationalize a 15% haircut, but 50%? Makes it almost impossible to trade except to sell CC, until it isnt.

This price action has me questioning whether or not it WAS a bubble. There doesnt seem to be a floor, we're well below any technical support level. Is this just the opposite of what we experienced in 2021?

I keep hearing a fast recovery, but I am just not seeing it. It seems like Wall Street is deciding to revalue TSLA.

 

[mickle]

Well, we hit the Chicken Bottom @$140, which also happens to be $420 pre-split, can we go up now?

I'm once again thinking to sell half my shares DITM to protect the downside, maybe 60x -c120's, can always roll them up and out

And there you go, $138.85, but bounced hard back above 140, must have been a pile of buy orders waiting

I was thinking the same thing, no big dump when <140, so no sell limit orders were in place. I guess there is no one left that wants to sell shares and we go up?

edit: looks like I spoke too soon! I am depressed!

 

[SebastienBonny]

I was thinking the same thing, no big dump when <140, so no sell limit orders were in place. I guess there is no one left that wants to sell shares and we go up?

At some point there will actually be no sellers left.
That point should come closer and closer as long as we‘re keep on going down.
I don’t read anyone selling here, but of course this is mostly the big ones dumping shares or retail forced to sell because of margin calls etc…
Let this be a lesson when we’re higher again.

 

[dl003]

We're closing < $140 today, the selling pressure is relentless.

I am completely defeated here. I dont understand how a companies stock has lost > 50% of its value in less than 3 months. The only negative news is really the "miss" in Q3, Elon selling and the Twitter purchase. The Q3 delivery miss is somewhat related to the fundamentals of the company, but certainly not 50%. So I can rationalize a 15% haircut, but 50%? Makes it almost impossible to trade except to sell CC, until it isnt.

This price action has me questioning whether or not it WAS a bubble. There doesnt seem to be a floor, we're well below any technical support level. Is this just the opposite of what we experienced in 2021?

I keep hearing a fast recovery, but I am just not seeing it. It seems like Wall Street is deciding to revalue TSLA.

People are emotionally driven.

A lot of money has been made since April 2020. TSLA is one of the last remaining stocks that still holding on to its gains. Lots of weak hands are feeling anxious right now about preserving their gains by selling.

Funds are selling due to window dressing and tax loss harvesting.

Traders trying to front-run a weak Q4.

One thing feeds on another and this is what happens.

Oh and Elon selling has been stress testing the market, exposing who's weak vs strong.

 

[kabin]

On the bright side volatility is up and increasing premium. I'll take some rolling my covered calls down while acknowledging bounce risk at a new 52wk low.

 

[kabin]

I couldn't resist and nibbled on some more. Oy!

 

[OrthoSurg]

What a nice Christmas gift, instead of a Christmas rally, I receive a well packaged margin call from a -7% day while the rest of the NDX is green. It’s sad to realize TSLA was in a Elon aura bubble at the end of the bubble burst when there is no cash left.

Sorry for adding extra selling pressure tomorrow as I will get a margin call and have to start liquidating my core shares to close my nuked puts

 

[dmvevguy]

Due to being a long term TSLA stockholder, I am now numb to PAIN! I just bought an extra 100k worth of shares in my long term retirement accounts. Semis just delivered. CT next year coming soon. FSD is continuously iterating and improving. The future is bright!

 

[adiggs]

I’m hesitating to liquidate my portfolio and buy Jan25 LEAPS too.

I just don’t know if the MM will push the SP down 50% in 2 years too just because covid24 will hit Mexico and GigaMexico goes into lockdown 4 weeks

One issue that just occurred to me for those on margin - for Reg-T margin users (the US default) shares provide margin, long calls do not. That would be a particularly good reason to not make this conversion.

I'm not using margin (much), and the account where I did this is a retirement account (thus no margin). Wash sale rules are keeping me on the sidelines for such a conversion in my brokerage, but if we're still at fire sale prices in January then I revisit.


not-advice
The issue you point at is a real one. I'm taking the side of this bet that there is at most another year of push down, where push down really looks more like a low priced trading range (say 150-200; that's 450-600 pre-split). My rationale for this view being balance between bad macros and great company results / financials in 2023. I'm positioning though for the company results / financials to outweigh macros, at least up into the 200-250 range - I'll be unwinding some of my long stock and long leaps in that 200-250 range almost certainly (if we get there); I probably don't sell any cc until we're back in a 170ish range share price (or extended period at lower share price.

 

[OrthoSurg]

I got a brief moment of happiness after hours after the worst financial day of my life.

 

[Ruhdis]

STO at close -c $160 x 10 @ $0.25. This is so sickening. I'm probably going to get margin called around sp: $136.

I've been a lurking for a while and it's brought me a bit of comfort to read all your past experiences as we've fallen. Expensive lesson with margin. I remember the euphoria and thinking we'd never crash this hard. Thankfully I de-leveraged by about 50% when CGS started his synthetic shorts. I followed him with a few contracts of my own but closed way too early (still for a profit). Never thought we'd hit these levels without some serious fundamental changes and I would have just adjusted position if those ever occurred. Well here we are.

Curious, if/when we drop below $136 tomorrow, will TD just start liquidating my shares to keep margin % above maintenance requirements?