Wiki Selling TSLA Options - Be the House

[ReddyLeaf]

I’m still holding 5x -c225s 2025 LEAPs in one account. Others -c290s, -c300s of various 2023-2035 dates. Waiting, mostly as a hedge, on a further drop, but not expecting it necessarily. I buyback one or two whenever there’s enough premium generated from my weekly ICs and CCs. Not worried about an SP bounce just yet. We’re still in the upward channel, but in a downward trend to the bottom of that channel. Looking at the biggest options trades, there are a bunch of bearish bets, including sold ATM calls and some BOUGHT dITM puts (like 8/11 p275s, 8/18 p3xxs, etc). Who buys 1DTE +p275???? These weren’t rolls or spreads, so somebody is selling lots of shares ATM without affecting the SP. Anyway, it looks like there’s more downside, at least until the RSI and MACD are lower.

Crazy week again. Got scared out of a few positions too early again, just like last week. I suppose that’s the problem with being too close to ATM with spreads and ICs. Almost all of my 8/11 ICs expired worthless, except one set of -p245/+p235, but I still rolled things on Friday, some for better credit than others.

Now holding the following ICs:
8/18 +p225s/-p235s/-c245s/+c255s
8/18 +p225s/-p235s/-c250s/+c260s
8/18 +p230s/-p240s/-c245s/+c255s
Not happy with the -p240s, but they were rolled Friday for credit from the 8/11 -p245s. I’ll continue weekly rolls as long as necessary, hopefully widening the IC spread to eventually reduce risks.

Still realized decent profits this week, so bought back more LEAPS. Now left with only 4x Jun25 -c225s, everything else is OTM, the “worst” being 6x Jan25 -c260s. Everything else is -c300s. I’m satisfied with this process, and the results so far, slowly chipping away at the most ITM LEAP CCs. I’m committing less than $100k, often less than $50k, at risk on weekly IC spreads. I leave another $20k-$50k available as free cash for emergencies, or 1DTE ICs. Profits are in the 5-10% range, so only chipping away $2-$10k per wk but it’s enough. Weekly CCs are usually written close to ATM, but still $5-$20 OTM. This week it was -c260s, that got closed mid-week during a MMD, and resold at -c250s during an afternoon rebound, to squeeze out a bit more profit. I’m definitely less worried selling weekly CCs with all those ICs and LEAPs. That must mean I have graduated beyond Newbie.

As for TA, I’m really interested in what @dl003 is seeing in the waves. It still seems like there’s weakness down to the 220+/- level, through the Sept monthly. You can pick the Fibonacci points and get the 0.618 level to coincide with either of the two June gaps (220 or 235). Notice how we bounced at $242.xx (0.618 Fibonacci in one graph iteration below) all week long? Then there’s co-alignment with that mid-Feb peak. I don’t know, and don’t care, which one is the turnaround point, but I know it’s coming soon and I want all my ITM CCs closed by then. Those open Sept p210s, and June’s big gap, makes me think the lower target is still in play. RSI, MACD, and stochastics also seem to indicate that we haven’t quite bottomed yet. I would never fault a person for buying more shares at these levels, and will consider it myself after I close those 4x -c225s. However, if/when we reach the $220s, I will no longer sell ICs, and will switch to selling BPS only, might even consider adding to those Dec 2025 +c400/-c410s. As always, enjoy living the real life, and GLTA.

 

[Jim Holder]

Interesting IV play given TSLA is at 0% IV percentile, lowest in 52 weeks. (Recommend watching at 2x speed he speak so slooooww...)

 

[dl003]

Crazy week again. Got scared out of a few positions too early again, just like last week. I suppose that’s the problem with being too close to ATM with spreads and ICs. Almost all of my 8/11 ICs expired worthless, except one set of -p245/+p235, but I still rolled things on Friday, some for better credit than others.

Now holding the following ICs:
8/18 +p225s/-p235s/-c245s/+c255s
8/18 +p225s/-p235s/-c250s/+c260s
8/18 +p230s/-p240s/-c245s/+c255s
Not happy with the -p240s, but they were rolled Friday for credit from the 8/11 -p245s. I’ll continue weekly rolls as long as necessary, hopefully widening the IC spread to eventually reduce risks.

Still realized decent profits this week, so bought back more LEAPS. Now left with only 4x Jun25 -c225s, everything else is OTM, the “worst” being 6x Jan25 -c260s. Everything else is -c300s. I’m satisfied with this process, and the results so far, slowly chipping away at the most ITM LEAP CCs. I’m committing less than $100k, often less than $50k, at risk on weekly IC spreads. I leave another $20k-$50k available as free cash for emergencies, or 1DTE ICs. Profits are in the 5-10% range, so only chipping away $2-$10k per wk but it’s enough. Weekly CCs are usually written close to ATM, but still $5-$20 OTM. This week it was -c260s, that got closed mid-week during a MMD, and resold at -c250s during an afternoon rebound, to squeeze out a bit more profit. I’m definitely less worried selling weekly CCs with all those ICs and LEAPs. That must mean I have graduated beyond Newbie.

As for TA, I’m really interested in what @dl003 is seeing in the waves. It still seems like there’s weakness down to the 220+/- level, through the Sept monthly. You can pick the Fibonacci points and get the 0.618 level to coincide with either of the two June gaps (220 or 235). Notice how we bounced at $242.xx (0.618 Fibonacci in one graph iteration below) all week long? Then there’s co-alignment with that mid-Feb peak. I don’t know, and don’t care, which one is the turnaround point, but I know it’s coming soon and I want all my ITM CCs closed by then. Those open Sept p210s, and June’s big gap, makes me think the lower target is still in play. RSI, MACD, and stochastics also seem to indicate that we haven’t quite bottomed yet. I would never fault a person for buying more shares at these levels, and will consider it myself after I close those 4x -c225s. However, if/when we reach the $220s, I will no longer sell ICs, and will switch to selling BPS only, might even consider adding to those Dec 2025 +c400/-c410s. As always, enjoy living the real life, and GLTA.

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There are 2 possibilities in term of bullish wave counts:
1st conditioned on 298 being the top of wave 3. In this scenario, the buy zone starts at 240 and ends at 225. This is the one I've been using primarily. The 280-291 gap has to be filled before the 2nd leg down which can't go lower than 225.

2nd conditioned on 278 being the top of wave 3. This means the 240-298 run was a dead cat, a very aggressive dead cat but permissible as the previous rally was super impulsive. This actually makes nearly as much sense as the 1st scenario, only because the 240-298 run took the form of a 3 wave zig zag, which is a corrective pattern (meaning the drop from 278 to 240 was the 1st leg down). In this scenario, the buy zone starts at 230 and ends at 218. Since this is the final leg down, the 280-291 gap won't be filled before the next leg down as there will be no other leg down. Next time we see 280 it will be the start of a new bull run.

This consolidation phase is a lot trickier than the previous one (218-153). Back when we had seen only 1 impulsive runup from 102, it's all but guaranteed there will be a follow through once a bottom has been carved out, which it was at 153. Now that we've seen 3 complete waves, the question is "is that it or will we have a bona fide 5 wave bull run?" If this is it then we'll go a lot lower as the entire structure from 102 - 298 was just a correction to the upside during a bear market. If, however, we have on our hand a bona fide 5 waver then there's no telling how far the next leg up going to go. Therefore. absent a black swan, my thinking is 240 will act as a very strong floor as it is by far the most common target for this type of consolidation. We are already seeing this playing out with 240 holding under the pressure of selling the news, margin "concerns", Zack's resignation and escalated US-China tension.

If we keep getting a barrage of worse news, maybe the 2nd scenario buy zone (230-218) will come into play. Under no condition should we break 218 before P&D. Only stuff like Elon selling more stocks, Teslas no longer qualifying for IRA credits and China invading Taiwan can make it happen.

If we break 218, the bulls won't just outright die from there, but it can go a lot lower before bottoming out.

Obviously the TSLA bull in me thinks we will break 298. This cannot be just a big dead cat, knowing stuff like MSFT, AAPL and NVDA have already made fresh ATH. Is Tesla a worse company that those 3? Heck no. However, accidents can happen and market can remain irrational longer than we can remain solvent.

 

[Jim Holder]

There are 2 possibilities in term of bullish wave counts:
1st conditioned on 298 being the top of wave 3. In this scenario, the buy zone starts at 240 and ends at 225. This is the one I've been using primarily. The 280-291 gap has to be filled before the 2nd leg down which can't go lower than 225.

2nd conditioned on 278 being the top of wave 3. This means the 240-298 run was a dead cat, a very aggressive dead cat but permissible as the previous rally was super impulsive. This actually makes nearly as much sense as the 1st scenario, only because the 240-298 run took the form of a 3 wave zig zag, which is a corrective pattern (meaning the drop from 278 to 240 was the 1st leg down). In this scenario, the buy zone starts at 230 and ends at 218. Since this is the final leg down, the 280-291 gap won't be filled before the next leg down as there will be no other leg down. Next time we see 280 it will be the start of a new bull run.

This consolidation phase is a lot trickier than the previous one (218-153). Back when we had seen only 1 impulsive runup from 102, it's all but guaranteed there will be a follow through once a bottom has been carved out, which it was at 153. Now that we've seen 3 complete waves, the question is "is that it or will we have a bona fide 5 wave bull run?" If this is it then we'll go a lot lower as the entire structure from 102 - 298 was just a correction to the upside during a bear market. If, however, we have on our hand a bona fide 5 waver then there's no telling how far the next leg up going to go. Therefore. absent a black swan, my thinking is 240 will act as a very strong floor as it is by far the most common target for this type of consolidation. We are already seeing this playing out with 240 holding under the pressure of selling the news, margin "concerns", Zack's resignation and escalated US-China tension.

If we keep getting a barrage of worse news, maybe the 2nd scenario buy zone (230-218) will come into play. Under no condition should we break 218 before P&D. Only stuff like Elon selling more stocks, Teslas no longer qualifying for IRA credits and China invading Taiwan can make it happen.

If we break 218, the bulls won't just outright die from there, but it can go a lot lower before bottoming out.

Obviously the TSLA bull in me thinks we will break 298. This cannot be just a big dead cat, knowing stuff like MSFT, AAPL and NVDA have already made fresh ATH. Is Tesla a worse company that those 3? Heck no. However, accidents can happen and market can remain irrational longer than we can remain solvent.
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Thank you for the data!

How are you playing the next 2-3 weeks?

 

[dl003]

Thank you for the data!

How are you playing the next 2-3 weeks?

I'm actually not having any short term short call or put opened at the moment. This is not an area where I want to sell weekly calls into. If we get some good news and rally to 280+ I will look to sell calls again. If we keep going down I will watch for an impulsive thrust down to 225-230 before selling puts. If we keep taking the stair down to 225-230 then I will be a lot more cautious in term of short puts.

 

[Jim Holder]

I'm actually not having any short term short call or put opened at the moment. This is not an area where I want to sell weekly calls into. If we get some good news and rally to 280+ I will look to sell calls again. If we keep going down I will watch for an impulsive thrust down to 225-230 before selling puts. If we keep taking the stair down to 225-230 then I will be a lot more cautious in term of short puts.

Thanks.

You mentioned once that you never sell your longs. Wouldn’t it make sense to sell everything once a downtrend is confirmed, say like recently from $286 to around $240-230, and get back in once TSLA carves out its bottom and shows signs of heading back up? Doing so can significantly increase share count by buying more at the low with the money from selling at the high. In the past two years there were at least 2-3 occasions to have done this, with 2022 being the greatest opportunity. Since these waves are quite orderly and you’re anyway watching the market quite closely every day, it doesn’t seem so risky.

I guess some considerations for not selling at local tops is perhaps cap gains tax implications if it’s in a taxable account or shares are tied up in short calls. But otherwise why not?

For example, I have 3,000 shares I bought recently at $298 as buy/write shares. As TSLA fell and fell I kept thinking I’ll sell them, hold the cash, and get back in at the new bottom since I could earn significantly more by dumping the shares at say $265 and rebuying at $230-240 (3,000x $30 = $90k) than selling short calls on them. Yet I’m still holding them since I’m not sure if I’m missing something in the equation.

Forgive me if this is a silly/naïve question, I’m still learning.

 

[Zaddy Daddy]

Obviously the TSLA bull in me thinks we will break 298. This cannot be just a big dead cat, knowing stuff like MSFT, AAPL and NVDA have already made fresh ATH. Is Tesla a worse company that those 3? Heck no. However, accidents can happen and market can remain irrational longer than we can remain solvent

In what timeframe? Those other companies' earnings are growing, Tesla's are not (currently). Around $340 would put TSLA's PE ratio at about 100, which is quite high considering the earnings growth is essentially negligible right now. I would think investors would need to see growth pick up substantially before putting such a high PE on TSLA.

 

[dl003]

Those other companies' earnings are growing

Everyone's EPS peaked in 2021 and Tesla's is going up again, same as NVDA. NVDA got a PE excluding extraordinary item of 220. TSLA - 70.

 

[dl003]

Thanks.

You mentioned once that you never sell your longs. Wouldn’t it make sense to sell everything once a downtrend is confirmed, say like recently from $286 to around $240-230, and get back in once TSLA carves out its bottom and shows signs of heading back up? Doing so can significantly increase share count by buying more at the low with the money from selling at the high. In the past two years there were at least 2-3 occasions to have done this, with 2022 being the greatest opportunity. Since these waves are quite orderly and you’re anyway watching the market quite closely every day, it doesn’t seem so risky.

I guess some considerations for not selling at local tops is perhaps cap gains tax implications if it’s in a taxable account or shares are tied up in short calls. But otherwise why not?

For example, I have 3,000 shares I bought recently at $298 as buy/write shares. As TSLA fell and fell I kept thinking I’ll sell them, hold the cash, and get back in at the new bottom since I could earn significantly more by dumping the shares at say $265 and rebuying at $230-240 (3,000x $30 = $90k) than selling short calls on them. Yet I’m still holding them since I’m not sure if I’m missing something in the equation.

Forgive me if this is a silly/naïve question, I’m still learning.

Id like to have a core position in TSLA to never be touched. Anything outside of that I can trade in and out. This helps me sleep as night, knowing I always have a stake in that gigantic monolithic beast humming day and night 45 minutes away from my home. Of course, if I wasnt such a fanboy I may have made a lot more money but I am.

 

[UncaNed]

Just visiting from the TMC Fight club thread...

Aren't China's economy issues the biggest, most likely 800 pound gorilla in the room most likely to make the market drop dramatically, yet we're not discussing it here nor anywhere on TMC?

 

[intelligator]

Heavy OI increase at P200, half that added to P215 and P240, C252.5 and C260 increased as well. Glad the 8/18 +p220/-P230 order didn't fill Friday, -P220 or lower may be the better play this week.

 

[elasalle]

I closed my Jan 25 400 CC's in personal for +40K gains, took some losses on PUTS, so +++ overall
Not sure when to reenter and sell Jan-Mar 24 CC's ...
*sold Mar 330 for $10 for portfolio /Cash mgmt ... moved 10K to the banks ...

 

[Zaddy Daddy]

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Everyone's EPS peaked in 2021 and Tesla's is going up again, same as NVDA. NVDA got a PE excluding extraordinary item of 220. TSLA - 70.

Even in your plots you can see NVDA expected next quarter's earnings to be way higher than current - e.g. actual high growth expected.

AAPL's PE ratio is 30.

You expect to get toward the PE ratio of NVDA with the earnings growth of AAPL?

 

[tivoboy]

Just visiting from the TMC Fight club thread...

Aren't China's economy issues the biggest, most likely 800 pound gorilla in the room most likely to make the market drop dramatically, yet we're not discussing it here nor anywhere on TMC?

Nobody want’s to discuss that narrative openly or objectively (in other areas) as it’s a big red flag for Tesla earnings and growth. Much like being open and honest about FSD viability and revenue contribution in the near-medium term. So, all I can say is lets don’t cross the streams here where it seems ppl are much more openly objective about at least short to medium terms impacts and how that informs making $$ and great trades. ;-0

 

[Jim Holder]

STO 30x -C265 8/18 @$0.52

BTC for $1.1k win and to take some risk off the table in case Highland or similar positive news is announced this week.

Will see how this week plays before putting on anything new.

 

[Right_Said_Fred]

Please take the general discussion about earnings, PE, the global economy, etc. to the main thread. This is the options thread. Also, the main thread could use the impulse to get its focus away from the Musk vs. Zuck trivia.

 

[Jim Holder]

Question:
I have 60x -C500 12/2025 that are now almost @40% profit. I got $248k from opening them back in June which went 100% to BTC -C that were at risk in the June run. It’ll cost $154k to BTC today. I don’t have that amount liquid so I just have to sit on my hands.

The contracts might anyway expire OTM at expiration, so maybe sitting and doing nothing is all I can do, and even if goes ITM it’s decent gains for the 6,000 shares @ $328 CB.

My question is, is there any clever way to capture the $93k gains before it disappears on the next run?

For additional context, I have:
6,000 shares ($328 CB)
11x -P300 12/2025 (received avg. $91.75/ea)
6x +C150 12/2025 (paid avg. $159.75/ea)
And am 100% margin free and looking to stay that way.

Columns: Today’s price | DTE | Gains | Opening price

 

[dl003]

Even in your plots you can see NVDA expected next quarter's earnings to be way higher than current - e.g. actual high growth expected.

AAPL's PE ratio is 30.

You expect to get toward the PE ratio of NVDA with the earnings growth of AAPL?

The keyword is "expected." If Tesla did what was expected of it when I first bought it, the stock would still be worth $18 today. Am I about to let Wall Street dictate who is the better company?

 

[mongo]

Question:
I have 60x -C500 12/2025 that are now almost @40% profit. I got $248k from opening them back in June which went 100% to BTC -C that were at risk in the June run. It’ll cost $154k to BTC today. I don’t have that amount liquid so I just have to sit on my hands.

The contracts might anyway expire OTM at expiration, so maybe sitting and doing nothing is all I can do, and even if goes ITM it’s decent gains for $328 CB.

My question is, is there any clever way to capture the $93k gains before it disappears on the next run?

View attachment 964790

Columns: Today’s price | DTE | Gains | Opening price

Covered calls?
If so, the gain on the calls is likely less than the loss on the underlying (delta < 1, offset by theta burn), so the $93k is only an accounting number. Which means when the stock price rises, your underlying will gain more value than the calls lose (roughly)

Non advice: As to position change, could sell shares to close calls at a nearly 10:1 ratio. Optionally buy calls/ sell puts to regain delta on position.

 

[tivoboy]

Question:
I have 60x -C500 12/2025 that are now almost @40% profit. I got $248k from opening them back in June which went 100% to BTC -C that were at risk in the June run. It’ll cost $154k to BTC today. I don’t have that amount liquid so I just have to sit on my hands.

The contracts might anyway expire OTM at expiration, so maybe sitting and doing nothing is all I can do, and even if goes ITM it’s decent gains for the 6,000 shares @ $328 CB.

My question is, is there any clever way to capture the $93k gains before it disappears on the next run?

For additional context, I have:
6,000 shares ($328 CB)
11x -P300 12/2025 (received avg. $91.75/ea)
6x +C150 12/2025 (paid avg. $159.75/ea)
And am 100% margin free and looking to stay that way.

View attachment 964790

Columns: Today’s price | DTE | Gains | Opening price

1 by 2 call spread maybe? Sell 2 higher possibly longer duration calls to finance buying back the 500/2025? Would probably have to do it in one transaction though and yes creates more exposure, but less viability (of being called). Frankly, I think you’re going to make more on the current position here in the near term, but it’s not going to come down as much obviously due to the time (theta) slower decay.