Wiki Selling TSLA Options - Be the House

[EVNow]

Strange day. With lower CPI (and inline core CPI) I expected a slight positive day ... 1% NASDAQ up (so, 2% TSLA), as the market opened.

Not sure why the market & TSLA are down. That too why 3% down ... and why was it up yesterday (when market was down). No real news that could drive TSLA prices.

Not that I'm complaining ... still waiting for a "bottom" to buy back the "lost" shares after last ER CCs.

 

[EVNow]

- European data / privacy organization gets involved (GDPR?). Worst case - Tesla is required to stop collecting data / video from cars in Europe due to lax / bad data handling practices. That would be a major blow to Tesla's autonomous driving ambition in Europe. (Involvement practically guaranteed - consequence unknown)

That was the first thing I thought about. As someone who works on data privacy - I'm quite aghast at the news. I'm sure if we found something similar in the companies I've worked for (including MSFT) anyone who did something like this would be severely reprimanded / fired. When it comes to audio/video there is no anonymizing. So, its all private and should be accessible only to people with special permissions for valid business reasons.

I won't be surprised if EU and even CA regulators are looking into this and will ask Tesla for more info (if they haven't already done) and we may see some kind of investigation formally opened at some point.

 

[intelligator]

Any known catalyst to see the SP back above 190 for Friday? Looks like a steady slide down, mid to high 170s seem probable... crazy movement.

 

[Max Plaid]

Strange day. With lower CPI (and inline core CPI) I expected a slight positive day ... 1% NASDAQ up (so, 2% TSLA), as the market opened.

Not sure why the market & TSLA are down. That too why 3% down ... and why was it up yesterday (when market was down). No real news that could drive TSLA prices.

Not that I'm complaining ... still waiting for a "bottom" to buy back the "lost" shares after last ER CCs.

Seems that any news is bad news these days... I suspect we need an actual rate-cut to allay the recession fears now

I'm trying to figure-out the market-wide dump at 14:22, I don't see anything to account for that

 

[dl003]

Any known catalyst to see the SP back above 190 for Friday? Looks like a steady slide down, mid to high 170s seem probable... crazy movement.

192 this morning was *the* DCB so no. Lower first.

 

[EVNow]

I'm trying to figure-out the market-wide dump at 14:22, I don't see anything to account for that

Anyone with a Bloomberg terminal ?

 

[Max Plaid]

Anyone with a Bloomberg terminal ?

Well I follow the WalterBloomberg account on Twitter, which reposts everything, the only thing at that moment was some oil guy saying that prices would go up in the 2nd half of the year, but that's hardly news given the already-known OPEC production cuts incoming

There have been some FEDiots speaking today, but nothing noteworthy... given the CPI and FOMC without surprises, it's all a bit odd idneed

 

[SpeedyEddy]

Any known catalyst to see the SP back above 190 for Friday? Looks like a steady slide down, mid to high 170s seem probable... crazy movement.

Roll-out of FSD in Europe announced + Next gen released + first CT delivered + Leaked terrific ER (NONE of this will happen so
NO
[Edit] FUD-level rising, so as GDP-issues will indeed be used to bring a final heavy blow in time, after ER, that are likely to be disappointing too. Some time ago I suggested Shorters would let run SP for another later attack. That ended now and they keep on luring for bad Tesla news on bad macro news and maybe play a role in emphasising these coming together. So brace... I will now go more aggressive on -cc until 174 is broken. Then if news still negative I roll, because bad news is very sticky on SP when already falling[/Edit]

 

[SpeedyEddy]

STO -CC 185 and 215 for 4/21 (8#)
STO -P 160 (2#)*
worth almost 12 shares in total
* will add on run down

 

[Vova]

If I had 666 cc trading at .72, I'd be looking at taking the early close!

I agree that its unlikely that they go ITM between now and then, but the opportunity could make for some sleepless nights. Hopefully at .72 you have recovered all of the losses accumulated getting into that roll, and you can end that position for break even or even a bit of profit at this point.


Really long dated options are rarely priced under $1. The leverage is just too high to risk. If Tesla were to announce great earnings, and guide to decreased cost of manufacturing leading to the ability to keep dropping price for demand purposes while maintaining high margins, right through the possible recession we're talking about... that could kick off kind of a fast jump in price.

It doesn't even have to push that position into the money for it to increase the value enough that you're effectively locked into the position until a whole lot closer to January.

Just one way to think about it. You've got .72/share left to earn in the position right now. Another way to think about it - if you close early, can you earn that .72 by selling new cc closer in? Heck - you could roll those down to 400s if you think that's a safe strike, and pick up some pretty significant coin if you still like the Jan '24 expiration. Not-advice - just ideas to consider. I don't know what I'd be doing, but this has gotten me thinking about some 3-9 month sorts of strikes at a really high strike. Might get me some income now and if share backed then I can also get a strike that will make me happy later to sell at...

Perfect!

It's a pity I don't speak/write English that well. On the other hand I need to be honest, I could not explain it better than @adiggs does.

 

[adiggs]

Perfect!

It's a pity I don't speak/write English that well. On the other hand I need to be honest, I could not explain it better than @adiggs does.

The fruit of a liberal arts education. I got so sick of writing papers by my 4th year, it almost made me physically ill. Now I like to write!

 

[Vova]

The fruit of a liberal arts education. I got so sick of writing papers by my 4th year, it almost made me physically ill. Now I like to write!

I am impressed about your knowledge of options. Thumbs up.

 

[dl003]

Imo, looking to news to explain a drop is not trading. Doing so, one will be forever at the mercy of the market. TSLA is the same stock as it was 4 months ago just as Tesla the same company. Keep in mind that the stock did drop all the way to 102 so please dont try to use long term fundamentals to explain why it cant or shouldnt drop any further than it is. Short terms, technicals trump fundamentals.

Personally I have stopped reading news and analyses for 6 months and gained so much clarity during that time.

 

[Right_Said_Fred]

If I had 666 cc trading at .72, I'd be looking at taking the early close!

I agree that its unlikely that they go ITM between now and then, but the opportunity could make for some sleepless nights. Hopefully at .72 you have recovered all of the losses accumulated getting into that roll, and you can end that position for break even or even a bit of profit at this point.


Really long dated options are rarely priced under $1. The leverage is just too high to risk. If Tesla were to announce great earnings, and guide to decreased cost of manufacturing leading to the ability to keep dropping price for demand purposes while maintaining high margins, right through the possible recession we're talking about... that could kick off kind of a fast jump in price.

It doesn't even have to push that position into the money for it to increase the value enough that you're effectively locked into the position until a whole lot closer to January.

Just one way to think about it. You've got .72/share left to earn in the position right now. Another way to think about it - if you close early, can you earn that .72 by selling new cc closer in? Heck - you could roll those down to 400s if you think that's a safe strike, and pick up some pretty significant coin if you still like the Jan '24 expiration. Not-advice - just ideas to consider. I don't know what I'd be doing, but this has gotten me thinking about some 3-9 month sorts of strikes at a really high strike. Might get me some income now and if share backed then I can also get a strike that will make me happy later to sell at...

Thank you for the advice. Guess what: the total premium I got for the original calls, rolling them out a few weeks and then rolling them out two years was $17.50 per call ($52.50 before split). So closing them now would be a huge win. And still I don’t feel like it. Simply because in my view we cannot go up by an average of 3-4% per week for 40 straight weeks. Maybe when the premium gets down to $0.30 or so I will consider it.

 

[Vova]

Thank you for the advice. Guess what: the total premium I got for the original calls, rolling them out a few weeks and then rolling them out two years was $17.50 per call ($52.50 before split). So closing them now would be a huge win. And still I don’t feel like it. Simply because in my view we cannot go up by an average of 3-4% per week for 40 straight weeks. Maybe when the premium gets down to $0.30 or so I will consider it.

With all respect, I think you're missing the point @adiggs tried to explain.

 

[Right_Said_Fred]

With all respect, I think you're missing the point @adiggs tried to explain.

If I understood correctly he suggested I buy back the calls if they already lost a lot of the original premium. They did. I tried to explain why I don’t feel like closing them yet (even though I very much appreciate the advice).

 

[mongo]

If I had 666 cc trading at .72, I'd be looking at taking the early close!

I agree that its unlikely that they go ITM between now and then, but the opportunity could make for some sleepless nights.

Sleepless nights?
With a >650 strike price? That's 50% over the ATH in the next 8 months. I'd love for that to happen.
Only reason I can see to worry is if they aren't covered calls.
Am I missing something?

Speaking of missing something...
After doing mostly nothing for years other than watch my balance move up and down, it seems like generating a stream of cash to live off of would be useful.
I have a tax deferred account. Other than kicking myself if/when TSLA rockets up for some unknown reason, is there a down side to just selling ATM or slightly OTM calls every week and just rebuying shares if assigned? Basically, the wheel without puts.

For example, 182.50s for next week are $8 for a 4% return on premium over 1.5 weeks, which extrapolates to 3x annually if done every two weeks.

If TSLA moves above premium + strike, then my share count goes down, but my dollar value still increases, so (ignoring 100 share rounding) the biweekly return keeps compounding.

 

[MikeC]

Sleepless nights?
With a >650 strike price? That's 50% over the ATH in the next 8 months. I'd love for that to happen.
Only reason I can see to worry is if they aren't covered calls.
Am I missing something?

Speaking of missing something...
After doing mostly nothing for years other than watch my balance move up and down, it seems like generating a stream of cash to live off of would be useful.
I have a tax deferred account. Other than kicking myself if/when TSLA rockets up for some unknown reason, is there a down side to just selling ATM or slightly OTM calls every week and just rebuying shares if assigned? Basically, the wheel without puts.

For example, 182.50s for next week are $8 for a 4% return on premium over 1.5 weeks, which extrapolates to 3x annually if done every two weeks.

If TSLA moves above premium + strike, then my share count goes down, but my dollar value still increases, so (ignoring 100 share rounding) the biweekly return keeps compounding.

Keep in mind the premiums for next week are extra high because of the ER. It won’t usually be 4% for NTM weeklies.

 

[vikings123]

Personally I have stopped reading news and analyses for 6 months and gained so much clarity during that time.

Same, I don’t follow Twitter or cnbc or any other social media during trading hours. Life has become so much less stressful that way lol. I mostly just rely on TA and listen to Rob in the evenings and of course have a broad view of Tesla events.

 

[adiggs]

Thank you for the advice. Guess what: the total premium I got for the original calls, rolling them out a few weeks and then rolling them out two years was $17.50 per call ($52.50 before split). So closing them now would be a huge win. And still I don’t feel like it. Simply because in my view we cannot go up by an average of 3-4% per week for 40 straight weeks. Maybe when the premium gets down to $0.30 or so I will consider it.

You're keeping 17.50 per call and 100 shares tied up for as much as 9 months to earn .72. Or the early close you're looking at - earn an additional .42. Holding to expiration you're lined up to earn .02/week for each call. Holding to the .30 number you're looking at earning an incremental .01/week.

The question I would ask myself - is the position you're in right now, a position you would open right now? Would you sell new calls of this kind for .72? If yes, that's a great reason to keep the position, or even add to it.