Wiki Selling TSLA Options - Be the House

[Zaddy Daddy]

TSLA's PE ratio is still at a quite lofty 70, with negative earnings growth.

I get technicals and all, but hard to see the stock dipping just a little bit more but rebounded to over $250 (PE Ratio of 80).

Thinking this thing is going over $300 anytime soon (PE ratio of 100) is insanity IMO considering earnings are shrinking.

My guess is this thing oscillates +- $30 around $200 for the next 3 months.

 

[MrMoo]

Bad day today (For stock and call holders), I enacted my play from my previous post. Rolled down existing CC's and naked CC's. December 15 400's rolled down to 300, January 500's rolled down to 400. I got about a $1 ($100) a contract for the Decembers (and the 400's were already at 90% profit) so that wasn't bad.

I think I mentioned previously I've already sold 30% of my long shares so i'm looking to sell puts at the $200 range and ease back in there. I've already sold a small handful expiring today and next week. See how things play out.

I'm still pretty disappointed by Teslas fundamentals and Elon blaming everyone but himself. I would be willing to bet my life that if he just shut up and wasn't so vocal on Twitter we would have sold at least 1 more car. I wonder how many more.... At this point I'm fairly confident I've made more money selling contracts than owning Tesla shares lol.

 

[Jim Holder]

Options aggregate through end of 2023 (10/27-12/15):

This is of January 19, 2024, notably the $260 and $300 strikes remain quite alive:

 

[EVNow]

The usual YT suspects are all bearish. Don't remember seeing that in a long time. I think price movement will depend on how many whales bail vs enter.

 

[Jim Holder]

 

[OrthoSurg]

I'm closing my bearish bets tomorrow and looking for bottom to start selling puts again.

Do you expect a bottoming process tomorrow or more downside in the next few days. Couple TA traders talking about 212 s a key support level to know if we resume a bear trend channel.

My read is SPY bottomed out at 420. How long that bottom is good for remains to be seen, but what followed it revealed a lot about the path forward.

From 420, SPY made a clear impulsive rally consisted of 5 green waves, the 5th of which is made up of 5 red sub waves and is far longer than conventionally expected. We call this an extended wave 5. When an extended wave 5 forms, the correction that follows will take it back normally to the area between the bottom of red sub wave 2 and bottom of green wave 4, which is the red box down below. It's been my expectation that SPY would eventually revisit this area before going back up, no matter how many tricks it threw at bulls and bears. It did that today and so let's see if we have another run.


View attachment 983523

When the first leg up or down is made up of 5 waves, then what's the lesson? Yes, there will be a follow through. If SPY makes another run of equal length to the 420-438 run, it will get to 445, conveniently testing the upper trendline. If it breaks out of this trendline, we're looking at SPY 470-500 in early 2024. Maybe it won't break out of 445, but the fact that it's so close to the red box gave me doubt about TSLA falling much more from the AH low yesterday.
View attachment 983529
Car and residential home sales have crashed. There's no way around it. These are the building blocks of the American economy. Meanwhile, corporate earnings have proven more resilient than feared. I think we have a combination of a lack of bearish narratives and a hope for rate cuts in the near future.

Yes, last night ER was a miss. However, is it enough to make me question my decision to be in TSLA? No, and neither should most people. TSLA is falling not because it's a failure, but because the Fed is. I think it's going to be one of the components in a hopium-fueled year-end rally as car makers are direct beneficiaries of easing monetary policies. Q3 ER is already yesterday news. In the next run, I think many people will think "but, but, but TSLA is not making any more money than last year, how could this be?" but the fact is it doesn't have to make more money than last year. It just has to make more money than Q3 2023 to join the hopium trade. What remains to be seen now is where is the bottom?

Also remember TSLA went down to 212 in August as market was trying to price in a bad Q3 ER. It's proven bad now but where is 212? Maybe the market went too far?

thanks for making sense in my life.

 

[OrthoSurg]

The usual YT suspects are all bearish. Don't remember seeing that in a long time. I think price movement will depend on how many whales bail vs enter.

I know just read that

 

[OrthoSurg]

That guy is irrelevant.

Yes I know he used to be a permabull before covid and now turned in a permabear once fed pivoted.

Cory talking about possible bottoming at $214 and selling probably reaching an end unless it is broken then recommends going risk off.

 

[MrMoo]

Yes I know he used to be a permabull before covid and now turned in a permabear once fed pivoted.

Cory talking about possible bottoming at $214 and selling probably reaching an end unless it is broken then recommends going risk off.

Yes I'm also very confident in saying that around 212-214 is the bottom unless it isn't in which case it'll go lower.

 

[intelligator]

For tax purposes and clearing margin, I sold a couple hundred shares on 10/4 with extremely low cost basis ($26). Given that the shares were sold at a profit, can I buy back shares in less than 30 days and retain the benefit of the loss offset by the gain? I am trying to avoid wash sale rules which I understand to be the case if I sold shares at a loss and repurchase similar in less than 30 days... that would cancel the loss. I'm not looking to rush in but if I can re-buy with the proceeds of selling 200x @ $252.50, i'd pick up 30 or so more shares than what I sold down here in the 2-teens. I don't see us here 11/10. Thoughts?

 

[mongo]

For tax purposes and clearing margin, I sold a couple hundred shares on 10/4 with extremely low cost basis ($26). Given that the shares were sold at a profit, can I buy back shares in less than 30 days and retain the benefit of the loss offset by the gain? I am trying to avoid wash sale rules which I understand to be the case if I sold shares at a loss and repurchase similar in less than 30 days... that would cancel the loss. I'm not looking to rush in but if I can re-buy with the proceeds of selling 200x @ $252.50, i'd pick up 30 or so more shares than what I sold down here in the 2-teens. I don't see us here 11/10. Thoughts?

You made a profit and you'll owe tax on it.
Rebuying has no impact on that transaction.

 

[adiggs]

I'm still pretty disappointed by Teslas fundamentals and Elon blaming everyone but himself. I would be willing to bet my life that if he just shut up and wasn't so vocal on Twitter we would have sold at least 1 more car. I wonder how many more....

An observation about this - specifically regarding Elon beign less vocal on Twitter (I agree, at least regarding topics other than Tesla / SpaceX / Boring / etc...) - where does the extra car sale come from? I'm sure he could have helped at least a few people more WANT to buy a car. The problem isn't finding people that want to buy Teslas - not really. The problem is having Teslas available for people to buy (supply, vs. demand).

The big to-do analysts make out of the quarterly delivery vs. production is much ado about nothing. When Tesla has a 90 day supply of cars to sell on hand, then I'm ready to agree that the company is no longer selling everything they make. Right now the company struggles to even have 30 days of cars on hand. That's like 150k or so?

Actually - I would like to see 150k on hand, worldwide, on a sustained basis. I'd like to see every gallery / service center to have a local supply of cars that people can drive away immediately when they want to. A significant component of the car market are people that need a car right now, and if you don't have one for them, then they're going down the road to the next dealership.


Tesla hasn't had a demand problem for >10 years now. Tesla has had, and has now, a supply problem. Elon has made it clear that he'll be pushing the prices of Teslas down as aggressively as they can and still make money, in order to maintain this state. The Secret Master Plan(s) and company mission demand this behavior.

 

[jeewee3000]

I know just read that

That $69 PT is quite ridiculous. One of the reasons IMO is that, were TSLA to actually go below say $100, the board would be much more inclined to do a share buyback. In other words, the lower the $TSLA SP, the higher the chances of an approved buyback.

I know Tesla wants to keep a large War Chest and positive FCF, but on the other hand Musk is too rational to pass up on a sure thing.

In the Isaacson biograpy which I'm currently reading, I was reminded of the time when Elon (as an intern) pointed out to a banker that certain bonds that had dropped well below their intrinsic value could be scooped up and then sold 1-2 years later for millions of profit. (I forget the details, maybe it was billions, or another timeframe, but the thing is there was a lot of money to be gained in a very safe trade)

The banker refused because they were already overexposed to those bonds, boggling Elon's mind.

If he sees $TSLA at insanely low prices, like well below current value (as in, according to traditional valuations), Musk will convince the board to buyback with at least some part of the profits every quarter until $TSLA regains a better valuation. Again, he's too rational not to.

Currently I understand his skepticism regarding buybacks: if the company goes under buybacks will have been useless. Also, if after a buyback the SP hasn't bottomed you just lost value. So I'm not expecting buybacks as long as $TSLA is floating above $100 -$150.

 

[Max Plaid]

That $69 PT is quite ridiculous. One of the reasons IMO is that, were TSLA to actually go below say $100, the board would be much more inclined to do a share buyback. In other words, the lower the $TSLA SP, the higher the chances of an approved buyback.

I know Tesla wants to keep a large War Chest and positive FCF, but on the other hand Musk is too rational to pass up on a sure thing.

In the Isaacson biograpy which I'm currently reading, I was reminded of the time when Elon (as an intern) pointed out to a banker that certain bonds that had dropped well below their intrinsic value could be scooped up and then sold 1-2 years later for millions of profit. (I forget the details, maybe it was billions, or another timeframe, but the thing is there was a lot of money to be gained in a very safe trade)

The banker refused because they were already overexposed to those bonds, boggling Elon's mind.

If he sees $TSLA at insanely low prices, like well below current value (as in, according to traditional valuations), Musk will convince the board to buyback with at least some part of the profits every quarter until $TSLA regains a better valuation. Again, he's too rational not to.

Currently I understand his skepticism regarding buybacks: if the company goes under buybacks will have been useless. Also, if after a buyback the SP hasn't bottomed you just lost value. So I'm not expecting buybacks as long as $TSLA is floating above $100 -$150.

Also, Elon has a shitload of options to vest before 2028, more than he exercised end 2021, beginning 2022. If the SP were to drop that low he'd be able to exercise those options with a very low tax impact, which would dodge a bullet we're facing in the coming years as well

 

[thenewguy1979]

Rebound incoming this morning. SP is green premarket. Beware of the DCB. Macro aint too positive. Let see what today bring.

 

[Max Plaid]

Do we dump from here then? I ask because having closed out my LEAP short calls yesterday I'm thinking to sell my LEAPS into cash as well

Why? Because I'm eager to flip my LEAPS back into shares and sitting on a pile of March +p200's, if we were to drop below 200 then that's a prime buying opportunity, IF I have the cash on-hand

Decisions decisions...

 

[thenewguy1979]

Looking for sp bounce 224-228 then drop furthur to 212 or less. Consensus is bottom not in yet.

 

[CHGolferJim]

Do we dump from here then? I ask because having closed out my LEAP short calls yesterday I'm thinking to sell my LEAPS into cash as well

Why? Because I'm eager to flip my LEAPS back into shares and sitting on a pile of March +p200's, if we were to drop below 200 then that's a prime buying opportunity, IF I have the cash on-hand

Decisions decisions...

While shares would be a prime buying opportunity at below $200, would the potential gains match that of the LEAPs you currently own?

 

[Max Plaid]

While shares would be a prime buying opportunity at below $200, would the potential gains match that of the LEAPs you currently own?

I already offloaded my 90x Dec 2025 +c140's a few weeks back for 100% profits and bought 60x +c200's instead to go with the existing 60x

So I can offload all the +c200's for almost break-even, but if the SP dumps more they'll lose value fast, and then the clock starts ticking to expiry and all the worry that brings

I always said that I wanted to go back into shares, and was holding the +c200's to expiry to exercise, but if I can get those shares now then I would sleep a lot better at night

My dream scenario from here would be to sell the calls, the SP does a 2022 and dumps to $100 - my March +p200's then allow me to buy 10k TSLA and pocket $1m at the same time, unlikely, but TBH, I see more reason for TSLA to crash now than I did this time last year

Have some upside cover with 135x +p270, against which I have written 30x Jan 2024 -p300 & 85x Sep 2024 -p300 -> need to watch the Jan -p300's though as extrinsic is getting low, another good reason to bank some cash IMO

 

[mongo]

Also, Elon has a shitload of options to vest before 2028, more than he exercised end 2021, beginning 2022. If the SP were to drop that low he'd be able to exercise those options with a very low tax impact, which would dodge a bullet we're facing in the coming years as well

That is highly against Elon's interests.
Tax impact in dollars is the wrong metric. Tax impact as percentage of take home in cash is key. And that improves with higher share price at exercise (well parity with final sale of stock).