Wiki Selling TSLA Options - Be the House

[Jim Holder]

What a stressful morning! Thankfully, I believed @dl003 ’s advice from a few days ago that if we broke the rising channel, then the SP would return into, and probably hard to the bottom of, the channel. Furthermore, since I had -c195s and -c200s sold yesterday (too early), that our prognosticator of prognosticators said could likely be rolled to safety, I decided to just enjoy the morning sunshine, cool temperatures and a beautiful walk in the park. On my return, checked the SP dumping to near $185 and did a little happy dance. Even considered selling +p155/-p175 BPS before the close, but decided to wait until tomorrow’s MMD to further follow @dl003 ’s predictions. Thank you, not for this particular prediction, but rather for helping me practice patience and timing, which will pay off for years to come.

So what can I add to the collective learning? TSLA just printed an inverse hammer or shooting star doji.
Guide To Understanding Shooting Star Candlestick Patterns

View attachment 940477

Today was stressful indeed. It made me doubt whether I'm cut out for this after all. I admire those who are stoic and have tricks up their sleeves from years of experience to ride things out and save potentially ITM -C instead of panic closing at a L.

Last Thursday I thought I was clever and STO several -C's laddered at $10 intervals (185, 195, 205) for the next 3 weeks, guessing it'll stay well out of the $5ish/wk upward cadence and I'll eat premium along the way. I also parked a bunch of -C210's at 6/30. This morning seeing the rapid surge to almost $193 scared me out of all of them "out of prudence" (except the -C195 for 6/2 which I left and they can happily take my shares).

Now I'm wondering whether to re-STO the -C195's for 5/26 and a lot of -C205 for 6/9 for $2 before we revisit $170-160 next. But that could be just as impulsive as closing the -C's earlier today.

Whose feeling bearish here?

A better question probably: What is proper trading hygiene in a week (or weeks) like this to extract gains without taking on irresponsible risks?

 

[Jim Holder]

It will be interesting to see if what Cary expects happens. It certainly flies in the face of our slight euphoria during the first day and a half of this week. Things change fast. Personally, I feel there’s a decent chance of SP $184-$185 at Fri close, enough to not do anything yet with 28May$185 CC.

With QQQ and SPY seemingly topping it may be the start of a broader reversal ‍♂

 

[intelligator]

If you ignore the OI at 200, there's more OI on the put side. I'll check Wednesday morning to see what happened today. Gamma flip projection is 181, will we see it before Friday?

 

[BornToFly]

The broader markets/macro brought TSLA down today. Hard to read too much into TSLA at this point. I think the politicians in Washington will determine what the market does next....

 

[FireMedic]

The broader markets/macro brought TSLA down today. Hard to read too much into TSLA at this point. I think the politicians in Washington will determine what the market does next....

I don’t always agree with Gary. But I think he’s got a point here. Debt negotiations may be tumultuous; but it’ll get done; nobody wants that blood on their hands.

https://twitter.com/x/status/1661050337044709389

 

[DaBooster]

I sold 10x 190cc this morning for 5.10
Bought back for 2.10

 

[FireMedic]

Another perspective:

Cary suggests that TSLA topped out today at the $192 area that $166.68 is a likely 1-3 week target from here.
$194.45 might be tried again but small chance of that happening.
$184.86 is bottom support for tomorrow, but it might be violated, especially if it opens below.
If it does, then $180.94 likely next. A close under $180.94 brings $166.86 shortly after.
In general we can expect $166.68 by end of the next week or so.

QQQ and SPY being on top of their ranges is adding to the pressure.

Cary suggests considering a $165-168 OTM +P for 14-21 days DTE (or sell -C190's?), or a +P145 put 60 days out.

Closing out those near-term -C this morning with strikes over $200 might not have been necessary for me after all.
After a great March and April recouping losses from last year, this month was completely off rhythm for me.

Cory here says stay bullish; and that it’s headed to $197-209. But also if it breaks $180 it’ll do what Cary says. GOOG and TSLA are both outside the upper BB for 3 sessions; traded nearly in lockstep today. It was a good time to cool off.

 

[MikeC]

Today was stressful indeed. It made me doubt whether I'm cut out for this after all. I admire those who are stoic and have tricks up their sleeves from years of experience to ride things out and save potentially ITM -C instead of panic closing at a L.

Last Thursday I thought I was clever and STO several -C's laddered at $10 intervals (185, 195, 205) for the next 3 weeks, guessing it'll stay well out of the $5ish/wk upward cadence and I'll eat premium along the way. I also parked a bunch of -C210's at 6/30. This morning seeing the rapid surge to almost $193 scared me out of all of them "out of prudence" (except the -C195 for 6/2 which I left and they can happily take my shares).

Now I'm wondering whether to re-STO the -C195's for 5/26 and a lot of -C205 for 6/9 for $2 before we revisit $170-160 next. But that could be just as impulsive as closing the -C's earlier today.

Whose feeling bearish here?

A better question probably: What is proper trading hygiene in a week (or weeks) like this to extract gains without taking on irresponsible risks?

I got lucky (so far) with my short calls in the 180s - the stock could have just as easily kept going to 200 as retrace to 185. What experience did help me with today was to not roll out for minimal strike increase. I would have taken a 1-week roll for a $5 strike increase that kept me ATM, but going out a week for $2.50 (or 2 weeks for $5) and still being ITM wasn't appealing.

In situations like this in the past, I had rolled out 4 weeks or more just to raise the strike $10 or whatever. Then we would dip back, but of course the new farther out expiration retained too much value to close. So I would hold and then in the following weeks or months the new strike would inevitably get run over and I'd lose the shares. This time, I was trying to mentally stay at peace with losing the shares this week. I've had the most success selling options when ambivalent about whether the contract executes or not. It helps to decrease the anxiety of trying to predict what is "safe" and prevents reactionary panic moves.

At the end of the day, what we're really selling is a choice to someone else who is willing to pay for it. If I can find a way to be content with either outcome, it's basically free money.

 

[Jim Holder]

The stock could have just as easily kept going to 200 as retrace to 185.

Yes, this so easy to forget when I'm mentally flogging myself. In fact I felt smart this morning protecting the shares from a strike too low. Only when we got the reversal did I feel like an idiot.

In situations like this in the past, I had rolled out 4 weeks or more just to raise the strike $10 or whatever. Then we would dip back, but of course the new farther out expiration retained too much value to close. So I would hold and then in the following weeks or months the new strike would inevitably get run over and I'd lose the shares.

This time, I was trying to mentally stay at peace with losing the shares this week. I've had the most success selling options when ambivalent about whether the contract executes or not. It helps to decrease the anxiety of trying to predict what is "safe" and prevents reactionary panic moves.

Same. I've touched the live wires too much and got burnt by speculating strike and DTE that I see I have to dial it down and wait until SP get closer to my various CB lots ($200+) so I can comfortably sell CC's against them without needless worrying. I'll still speculate a little, but I've been too frisky lately and it cost be all my gains in May.


Thinking about STO tomorrow:

1) TSLA Sep 15th 240 Short Call (x19)
For the delta. Just to use it like a hyper-bus ride the SP down to $170-160 and BTC there. Anything closer than 9/15/23 brings little premium. Can pick up $7-10k on retracements as shallow to $163. And if it runs away from me then cut it at a $1.5k stop loss. And if TSLA does it's $20 days and I can't get out, then I'm okay waiting 3.5 months to sell my shares at that price. Makese sense?

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optionstrat.com

2) TSLA Jun 16th 200 Short Call (9)

TSLA Jun 16th 200 Short Call (8) | OptionStrat

View my options strategy on OptionStrat

optionstrat.com

3) TSLA Jul 21st 215 Short Call (7)

TSLA Jul 21st 215 Short Call (6) | OptionStrat

View my options strategy on OptionStrat

optionstrat.com

Remember these three are intended to be an elevator's down to gain as the SP drops and BTC at lows. The strikes are only in case of crazy revseral where I become stuck in the trade and for whatever reason have to let it ride out.

Feedback welcome!!

 

[ReddyLeaf]

Thinking about STO tomorrow:

1) TSLA Sep 15th 240 Short Call (x19)
For the delta. Just to use it like a hyper-bus ride the SP down to $170-160 and BTC there. Anything closer than 9/15/23 brings little premium. Can pick up $7-10k on retracements as shallow to $163. And if it runs away from me then cut it at a $1.5k stop loss. And if TSLA does it's $20 days and I can't get out, then I'm okay waiting 3.5 months to sell my shares at that price. Make sense?………

Remember these three are intended to be an elevator's down to gain as the SP drops and BTC at lows. The strikes are only in case of crazy revseral where I become stuck in the trade and for whatever reason have to let it ride out.

Feedback welcome!!

IV and premiums are very low right now, so selling longer term CCs really doesn’t make much sense. Furthermore, @dl003 predicted something like $250 this year. Why sell into that? I’m trying to only sell <3DTE, for minimal premiums that are nearly guaranteed to expire worthless, and use the cash to buyback previously options rolled after Q1 earnings jump. Watch out for the steamroller. The cyber truck is coming out soon and that should create some buzz.

 

[Max Plaid]

IV and premiums are very low right now, so selling longer term CCs really doesn’t make much sense. Furthermore, @dl003 predicted something like $250 this year. Why sell into that? I’m trying to only sell <3DTE, for minimal premiums that are nearly guaranteed to expire worthless, and use the cash to buyback previously options rolled after Q1 earnings jump. Watch out for the steamroller. The cyber truck is coming out soon and that should create some buzz.

A prediction of "$250 sometime this year" is nice, and may well happen, or may well not, but when would it be, July, December...?

If I've learned anything it's that TSLA makes big moves when you least expect it

I think the best approach is to rather than aim for weekly amounts, sell calls on strength and puts on weakness... if we're in a definite channel, then play both sides equally until it breaks out

If you're worried about long term upside, don't sell calls again your shares, or sell $1 premium weeklies, which will be safe most of the time, but not always... there's always risk

 

[CHGolferJim]

Down below $183 currently in pre-market, so does that portend an up day?

 

[UltradoomY]

Something I saw last night was that Tom Zhu exercised some options to buy. Something like 180K shares.

We have not seen any insider buying for years, only selling of shares.
So why do I bring this up now? These options were not set to expire until 2033 - 10 more years on the clock.....

Seems to me that our new Senior VP of Auto is feeling bullish and wants to capture some upside... Burnt Hair coming soon.

I am thinking of converting into more leaps at the $200 strike if we head down - my average on them is in the low $40's now and if I can get them for sub $60's I am going to sell some ITM calls to get it done.

Good luck all.

 

[Max Plaid]

Something I saw last night was that Tom Zhu exercised some options to buy. Something like 180K shares.

We have not seen any insider buying for years, only selling of shares.
So why do I bring this up now? These options were not set to expire until 2033 - 10 more years on the clock.....

Seems to me that our new Senior VP of Auto is feeling bullish and wants to capture some upside... Burnt Hair coming soon.

I am thinking of converting into more leaps at the $200 strike if we head down - my average on them is in the low $40's now and if I can get them for sub $60's I am going to sell some ITM calls to get it done.

Good luck all.

Yeah, I want some more 2025 LEAPs - as mentioned up-thread I was going to sell my Dec 2025 c140's and flip to c200's, but that makes no sense, better Delta on the 140's, so instead will add c200's

 

[Right_Said_Fred]

Rolled 10 x -p165 for this Friday to 10 x -p172.5 for next Friday. Net premium received was $1.73. Ofcourse this was too early...

I also have 10 x -p160 for next Friday, a position opened last week.

 

[scubastevo80]

Yeah, I want some more 2025 LEAPs - as mentioned up-thread I was going to sell my Dec 2025 c140's and flip to c200's, but that makes no sense, better Delta on the 140's, so instead will add c200's

How do you all think about LEAP rolls? I have June '24 133.33 LEAPS, and to roll out 18 months to Dec '25, I'd have to roll up to $175s (or $160s for June '24). How do you all think about your DITM LEAP rolls?

 

[juanmedina]

I guess the trip to the moon got cancelled . I am going on vacation for 3 weeks and so far it looks like my calls for this week will expire which is great because I am not planning on doing any trading. That roll that I did yesterday was a fail; oh well you cannot win them all. At least for the year I am doing great.

 

[Max Plaid]

BTO 60x Dec 2025 c200 @$58

 

[EVNow]

or sell $1 premium weeklies, which will be safe most of the time, but not always... there's always risk

We are getting $1 premium weeklies for about $10 OTM now. So probability of ending up ITM is about 20% - have to check.

A prediction of "$250 sometime this year" is nice, and may well happen, or may well not, but when would it be, July, December...?

If we are at about 200 pre-ER and get a good ER, 250 is quite possible. Q3 looks more likely than Q2 - so sometime in November?

 

[Max Plaid]

We are getting $1 premium weeklies for about $10 OTM now. So probability of ending up ITM is about 20% - have to check.


If we are at about 200 pre-ER and get a good ER, 250 is quite possible. Q3 looks more likely than Q2 - so sometime in November?

Yeah, IV is super-low still, despite the recent run up... $200 pre-ER seems distant today, but close yesterday... ergo, a good moment to buy calls

I've pretty much given-up on wishing the SP to go up to any particular price, so I'm just looking to make money as best I can, hence the LEAP purchases - will be writing OTM calls against those, with 1:3 straddled puts (1 put, 3 calls), expectation is that the calls go ITM and I close out the lot, then see what to do next...

One would expect that the markets will reverse once the debt-ceiling is resolved, so I'm waiting until then to write against them