Wiki Selling TSLA Options - Be the House

[Cherry Wine]

In for 20x 10/13 -c300s.

Also picked up some cheap 10/20 +p200s.

 

[EnzoXYZ]

I have a quick noob question.

When selling a call, will your shares be called away anytime after it hits the strike price or will it be called away anytime after the strike price+premium is hit?

My experience with selling calls the last 3 years- NEVER once ,even deep in the money, has the shares on the calls been called away. I had -160Cs for the longest time when we were near 300 OR -600Cs when we were near 1100+ pre split. On the other hand, sold PUTs are VERY likely exercised like ridiculously likely. Its as if the market makers/ wall street knows margin is a thing and the most hurtful way to flush us out. I better be ready to take the shares NOT on margin if I'm selling puts.

Of course YMMV
But I do wonder how many of us with DITM -Cs were exercised.

 

[Jim Holder]

STC 7x +C150 12/2025 @137.50 - Planning to buy back lower

Added a few more:
STO -C275 10/20 @$5.55
STO -C285 10/20 @3.50
STO -C300 10/20 @1.65

Sold 270 shares in smaller account @$254.75

Still waiting before selling half of the 6,000 longs.

 

[tivoboy]

Selling 10 10/20 -c255 looking to top tick around $14, will take $13.50

 

[EnzoXYZ]

The capital gains would be devastating.

Question - when an option is assigned, do you get to attribute the shares they've taken away by ID, like you do anytime you sell a bunch of shares (you can usually select F.I.F.O. or L.I.F.O. on your brokerage's dashboard, but then right after selling shares, you have a day or two to go back and select "By ID", selling your most expensive shares to minimize tax liability vs. those that you bought at only $16.

If it does allow you to assign specific shares, then perhaps this might be a good reason to buy and hold enough shares on the dips so that you always have anough more recently purchased shares that cost more than your longest held shares you can attribute to being called away due to the option being called away to minimize yor tax burden.

I use Schwab and TD and both lets you ID the shares to be called away. Doing the wheel strategy I had many shares called away with the highest cost bases. Some folks in here have mentioned you can call up the broker and specify individual lots that you want to sell though I haven't done that in the past.

 

[Cherry Wine]

My experience with selling calls the last 3 years- NEVER once ,even deep in the money, has the shares on the calls been called away. I had -160Cs for the longest time when we were near 300 OR -600Cs when we were near 1100+ pre split. On the other hand, sold PUTs are VERY likely exercised like ridiculously likely. Its as if the market makers/ wall street knows margin is a thing and the most hurtful way to flush us out. I better be ready to take the shares NOT on margin if I'm selling puts.

Of course YMMV
But I do wonder how many of us with DITM -Cs were exercised.

I've had some exercised early over the years, but they were ridiculously DITM. (Like $15 post-split strike)

 

[Jim Holder]

Was $254.77 it?

 

[EnzoXYZ]

Can this price rise be a trap for us? We are expecting a sell the news next week and adding on to our -C and probably get a +20 day next Monday/Tuesday. I have been sitting out or adding very little new positions with known binary events like P&D/earning events.

 

[SpeedyEddy]

Already started reeling in my puts for oct '20 (1x220 2x200 and now glancing at the lower strike prices, thinking about 5x195 and 6x190) seems like we hit the top for the day already, but a last minute run-up is often seen EOQ, although $TSLA is no stock to window-dress today, being a fund-manager, on the contrary it is a net looser this quarter, so this time I would not surprised to see a last-minute dump, which could be buy-backed after the P&D dip to generate the opposite next Q, huge win and growth in position of the winning stock, bought cheap. Anybody else thinking this is how fund managers would trade EOQ?

 

[Cherry Wine]

Can this price rise be a trap for us? We are expecting a sell the news next week and adding on to our -C and probably get a +20 day next Monday/Tuesday. I have been sitting out or adding very little new positions with known binary events like P&D/earning events.

A prudent decision. In the end, I only felt comfortable opening a manageable -C position at a relatively high strike the week in front of earnings because of this same concern. If the stock approaches my 10/13 strike, IV from earnings week will provide very favorable roll conditions.

 

[traxila]

The capital gains would be devastating.

Question - when an option is assigned, do you get to attribute the shares they've taken away by ID, like you do anytime you sell a bunch of shares (you can usually select F.I.F.O. or L.I.F.O. on your brokerage's dashboard, but then right after selling shares, you have a day or two to go back and select "By ID", selling your most expensive shares to minimize tax liability vs. those that you bought at only $16.

If it does allow you to assign specific shares, then perhaps this might be a good reason to buy and hold enough shares on the dips so that you always have anough more recently purchased shares that cost more than your longest held shares you can attribute to being called away due to the option being called away to minimize yor tax burden.

Counterpoint:

I wish I had been 'devastated' with long term capital gains on a significant portion of my holdings a couple of years ago as opposed to what actually happened.

Live and learn....

 

[BornToFly]

Can this price rise be a trap for us? We are expecting a sell the news next week and adding on to our -C and probably get a +20 day next Monday/Tuesday. I have been sitting out or adding very little new positions with known binary events like P&D/earning events.

I agree. We didn't have a Green great week going into P&D. Cybertruck delivery announcement coming soon. Down Monday/Tuesday is not guaranteed.

Edit: Actually today's pop could bring a green week....

 

[Max Plaid]

Trades today - I'm all done for the week:

BTC 100x 9/29 -p240 @0.1 -> STO 100x 10/6 -p245 @4.2
STO 40x 10/6 -c240 @17.1 -> BTC 40x 9/29 -c240 @12.1

-p240's for next week slipped away early on, so put the strike up a bit and reduced slightly the contracts from 110x to 100x -> 120x available for manoeuvre

The calls were fun, I STO for next week on the pop towards $255 at 10:05, then BTC on the dip below $252 at 10:29 -> grabbed an extra +$2 by waiting a bit, of course could have gone the opposite direction, but normally you'll get an opportunity at some point after such a strong open, normal...

Not really sure why my broker allowed me to buy 40x naked calls, but they did, and with zero margin impact, maybe their IT is confused by my rather complex LEAP/straddle setup

A good week, despite the -c240's going ITM, took premiums 3 times from those anyway rolling down from 270, 260, 250 then 240, and the puts were >95% profits

 

[SpeedyEddy]

Can this price rise be a trap for us? We are expecting a sell the news next week and adding on to our -C and probably get a +20 day next Monday/Tuesday. I have been sitting out or adding very little new positions with known binary events like P&D/earning events.

Nobody knows, but if we were to open lower on Monday it would be the 3rd (and smallest Island) reversal in a row, so not showing strength.
But if we skyrocket (first of all I would be in danger and) 263 MUST be hit and preferably crossed aloud to be considered more than a one-day-wonder.

 

[dl003]

In for +6x 10/27 200/195P & -1x 1/2024 160P (13 contracts per set)

 

[Jim Holder]

I don't know how to read flow, can anyone who does share what flow is looking like?

 

[elasalle]

I agree. We didn't have a Green great week going into P&D. Cybertruck delivery announcement coming soon. Down Monday/Tuesday is not guaranteed.

Edit: Actually today's pop could bring a green week....

Oct macro pop (by all means looks like we hit short term bottom ...)
P&D beat (deliveries = inventory+production) [australia, no US inventory even as Canada receiving some cars form China, new markets - turkey ...]
CT delivery
US Highland

...Don't Play with fire if you don't want to get burned (for the binary event). If you need insurance buy PUTS ... cheers!!
(nothing short-term for me ... )
... the Optimistic guy

 

[Max Plaid]

Counterpoint:

I wish I had been 'devastated' with long term capital gains on a significant portion of my holdings a couple of years ago as opposed to what actually happen.

Live and learn....

This is a very valid point, the number of times I should have taken profits, but was scared of the tax bill, only to regret it afterwards

 

[EnzoXYZ]

Counterpoint:

I wish I had been 'devastated' with long term capital gains on a significant portion of my holdings a couple of years ago as opposed to what actually happen.

Live and learn....

Totally agree that a $1M account with $1M cost bases is WAY better than a $1M account with $100K cost bases. I too found this out as we have been dealing with the ups and down of TSLA while depending on option generated income. When I see my cost base in my trading account rise I smile now knowing I may need to pull some money out and not get hit hard by taxes in a prolong down trend cycle.

 

[ReddyLeaf]

100% of my shares are 4 years old. Just trying to figure out what kind of 2025/2026 leaps I want to sell in order to capture a good chunk of premium and not be assigned in under a year.

The SP has just bounced off a rising channel bottom. Even though many are predicting a short-term drop, this is probably not the best time to sell CC LEAPS unless you’re willing to lose the shares (or roll as the SP approaches the strike. We just don’t know what the SP will do in the future. After a few years of trading options, I still make lots of mistakes, and take my lumps. FWIW, I currently have all my shares committed to CCs (still trying to recover from selling CCs earlier this year at a much lower SP), but I would not open new ones today on shares that I couldn’t afford to lose.

Edit: Like others, I bought some +p200s as insurance. Also closed 10/06 -p245 near the peak for 50% of the premiums. Probably should have left it, but I wanted to keep lots of free cash just in case I’m wrong.