Wiki Selling TSLA Options - Be the House

[dl003]

Sasha has an excellent take on the whole inflation story, as always, just common-sense, bit wrinkled with information for those that maybe don't follow these things too closely

Just wondering. This Steak 101 video, is it based on your watching preference or mine?

 

[corduroy]

In my opinion there is nothing overly risky about selling BPS. They can still be a smart trade and offer a defined risk with multiple management possibilities. If used in a "relatively safe way".

My 2 main rules of relatively safely trading BPS would be:

- Only trading them as cash secured BPS, so you have the cash to full close the max loss if need be. Or sell the long put and still be able to cover the short put with cash. Don't overleverage.
- Only opening in certain scenarios, like at the bottom of a trading channel (now for example). Not after a run up or near ATHs.

 

[Max Plaid]

View attachment 894915

Just wondering. This Steak 101 video, is it based on your watching preference or mine?

I am mostly carnivorous, so... could have been worse...

 

[SebastienBonny]

In my opinion there is nothing overly risky about selling BPS. They can still be a smart trade and offer a defined risk with multiple management possibilities. If used in a "relatively safe way".

My 2 main rules of relatively safely trading BPS would be:

- Only trading them as cash secured BPS, so you have the cash to full close the max loss if need be. Or sell the long put and still be able to cover the short put with cash. Don't overleverage.
- Only opening in certain scenarios, like at the bottom of a trading channel (now for example). Not after a run up or near ATHs.

Of course: add a bought put as a cover in case SP moves down. Roll the sold put (which is fully covered by cash) In that case and sell the bought put (which makes your trade a bit of a win).
Only downside is less profit if stock goes up, but without buying a put there’s no cover.

 

[JustMe]

Hey - any news causing the market dump just now?

 

[GrmMastrDoobie]

As others have said, this is a dangerous game and any option plays you do, any at all, carry the risk of massive losses

However, if I were wanting to increase my share count in your position then I would sell weekly covered-calls at a premium that will buy you 12x TSLA. You'd need around $1500 to do that, so you could go for 15x $1 premiums, -c140's for next week, or 40x 0.38, which would be -c150's, or any other permutation that suits your risk tolerance

The benefit of writing a smaller %age of your shares is that you can roll ITM's up and out, but still have contracts available to write for the next week. The benefit of writing 40x low premiums is that based on history, the SP hasn't moved more than 23% up Friday to Friday

But history means nothing and we're at a very low share price now. Just needs good CPI, DED pivot, strong Tesla earnings and guidance, CyberTruck order page, etc., and TSLA could go up 5% daily for a month. We've seen this before, we'll (hopefully) see it again. Then what will you do and how ill you feel? At least you can get wiped-out like with puts or spreads, but you could lose out on a lot of potential gains

Be very, very careful. If you do play this game, start small, play safe, take profits sooner rather than later

You will ge burned, we all got burned, some of us fatally

Edit: to add, you can also sell puts at the strike you sold your shares for, or slightly lower, it might not bring much, but it's essentially risk-free premiums... so if you sold at the absolute low, $101.20 then 6x 1/20 p-100's would net you $200, and a lower CDA if they were to exercise

Thank you for the information. Sounds like there is hope of getting my shares back without too much risk and time. Just need to be careful and patient. Doesn't sound like this is the right time to start selling CCs, but when the time is right I'll start slowly with only selling single contracts and only after I know more about rolling CCs, and have sat through that course at least once.

 

[Oil4AsphaultOnly]

In my opinion there is nothing overly risky about selling BPS. They can still be a smart trade and offer a defined risk with multiple management possibilities. If used in a "relatively safe way".

My 2 main rules of relatively safely trading BPS would be:

- Only trading them as cash secured BPS, so you have the cash to full close the max loss if need be. Or sell the long put and still be able to cover the short put with cash. Don't overleverage.
- Only opening in certain scenarios, like at the bottom of a trading channel (now for example). Not after a run up or near ATHs.

Except when you can no longer roll down your BPS for credit, because "This has to be the bottom, next week will be a bounce". Once at max loss (with no options to roll without significant debit) you close the BPS with cash and then open naked puts on margin, trying to recover your cash pile ... only to see the stock price fall further (and your available margin dwindle). Ask me how I know this.

Also, if your short puts get exercised on you (because circumstances), your cash pile disappears VERY quickly and your remaining BPS will probably be on margin.

 

[Yoona]

i think my 1/13 -p105 and -c130 are ready for tomorrow's CPI

the question is, should i move them now to 1/20 (to get the credits) and play the IV crush and then bring them back to 1/13 this Fri?

i dunno if that makes sense...

helpmeeeeeeeeeeeee

moving the Short Strangle 1/13 105-130 to 1/20 110-130 was the right move
got the creds and the IV crush

next steps for 1/20

• keep the -p110
• milk the -c130 some more, then perhaps BTC
• wait to buy shares at dip, STO ATM B/W at peak

 

[Cherry Wine]

Stock is right at that trendline I've been watching for a few days...

 

[Max Plaid]

Hey - any news causing the market dump just now?

I think it was SPY hitting 398...

 

[SebastienBonny]

Sold 130 CC again for next week. 2.2 around todays highs.

 

[kabin]

The market wants to go up but knows it needs to go down. It's great for scalping.

 

[EVNow]

Wondering whether my 125 calls will hold or not. Considering it got so close this week, have some interesting lessons about selling calls and various stats on "safe" OTM %.

As @Yoona has shared - 16% OTM calls are "safe" (7 day and 5 day). But in this case, Friday was a wild day - with a range of 101 to 113. I sold 125 calls around 110, a little less than 15%. Friday open was 103.63, so 16% is 120. So, 125 should be safe .... but, looks like we might have a week that breaks that 15.57% this week ?

 

[Max Plaid]

Sold 130 CC again for next week. 2.2 around todays highs.

I put an order to sell for $3.1, can wait until tomorrow... I'm not in a hurry...

 

[SebastienBonny]

I put an order to sell for $3.1, can wait until tomorrow... I'm not in a hurry...

That should take us to 126-127 tomorrow I guess…
Maybe it’ll hit that before going back to maxpain to close the week.

 

[Yoona]

Wondering whether my 125 calls will hold or not. Considering it got so close this week, have some interesting lessons about selling calls and various stats on "safe" OTM %.

As @Yoona has shared - 16% OTM calls are "safe" (7 day and 5 day). But in this case, Friday was a wild day - with a range of 101 to 113. I sold 125 calls around 110, a little less than 15%. Friday open was 103.63, so 16% is 120. So, 125 should be safe .... but, looks like we might have a week that breaks that 15.57% this week ?

View attachment 894965

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

 

[bry_bry]

I was able to further roll my short puts down at 135->130p and 130->125p from Jan 20 to Feb 17. All for net credits of $3.10 each contract.
I also have covered calls 160C and 175c for Feb 17.

I'm just going to keep widening my strangles (125p, 130p and 160c, 175c) and roll each month until I see a trend. When the stock price is close to ATM when you roll, at least the premium is quite good.

 

[Max Plaid]

That should take us to 126-127 tomorrow I guess…
Maybe it’ll hit that before going back to maxpain to close the week.

I expect MP to be 122 - 125 tomorrow, Hedgies obviously abandoned 120 abruptly, so I really suspect the p120's overwhelmed the c120's and lots of c125's were bought...

I'm cautious about selling these given that I'm looking for a 7% rise over the next week... but will stick to my "burner" shares and sell 26x, might even wait until Monday

 

[Yoona]

https://twitter.com/x/status/1613659753368150016

 

[Jim Holder]

@Yoona Can you share how you do a trailing stop on selling your options? I’ve seen you mention that several times as being a saving grace but I don’t see how to to that on my platform (TD Ameritrade app or TOS).

Thanks in advance!