Wiki Selling TSLA Options - Be the House

[EVNow]

And if the stock goes to 700 and the strike improvement turns out to be abysmal for both, 450CC will still net you $10 per share more than 420CC + $20 spread.

Thats correct.

But what @BornToFly (and people like I) are looking for is "steady income", with growth potential. Otherwise we shouldn't sell CC - afterall if we don't sell CC and SP goes to $700, it will net $250 more than a $450CC !

 

[dl003]

Thats correct.

But what @BornToFly (and people like I) are looking for is "steady income", with growth potential. Otherwise we shouldn't sell CC - afterall if we don't sell CC and SP goes to $700, it will net $250 more than a $450CC !

I never said don't sell CC. Please reread everything I said. I said if you're going to sell CC and you're going spend $2 to manage your risks, there are no noticeable differences between -420C + 400/420 vs -450.

 

[EVNow]

That 4 millions dollars in stock generating $200k a year. Is that the end goal?

Dumb lazy me would just put that it in an ETF like BST and get 5-10% dividend for year.

Well, $200k is 5% of $4M. But the hope is TSLA has better growth potential than BST. Afterall the whole discussion is around what happens if Tesla doubles in a year !

 

[EVNow]

I never said don't sell CC. Please reread everything I said. I said if you're going to sell CC and you're going spend $2 to manage your risks, there are no noticeable differences between -420C + 400/420 vs -450.

You don't see any noticeable difference in the table I posted above ? BTW, the risk @BornToFly is trying to manage, is not getting income in 2025. You are thinking of other risks (like lower cap appreciation). Different objectives.

 

[dl003]

You don't see any noticeable difference in the table I posted above ? BTW, the risk @BornToFly is trying to manage, is not getting income in 2025. You are thinking of other risks (like lower cap appreciation). Different objectives.

No. I don't see much of a difference. Net net, -450C gets you +10 after 450 while -420 & 400/420 gets you +20 at 420 which diminishes as it goes further out from 420 down to $0 at 400/440. Between 440 and 450, the -450C begins to win more and more, up to +10 at 450. These are miniscule figures. And if it proves anything, it's that -450CC is better the higher the stock goes, which is the very same risk you're trying to mitigate.

How is selling 420CC and buy 400/420 going to solve "not getting income in 2025" more effectively than selling 450CC if the stock goes to 500?

At 500, you will have an $80 ITM CC and $30 in cash while I will have a $50 ITM CC with $10 in cash. You have $20 more than me so you've achieved your objective, right? As long as we're both rolling our CC, who care how deep you are vs how deep I am, right? A lot of people think like you, as long as they get their cash they're happy, despite having their ITM CCs in a much worse position.

But watch this: what if I roll that -450CC I have down to -420C at that point? Suddenly I'll also have an $80 ITM CC, same as you, and $40 in cash ($10 from before and $30 from rolling 450 down to 420)

So at that point, whatever you decide to do with your -420CC, I can also do with my -420CC, but I will have $10 more than you for every share I own.

The ultimate objective should be to grow your account. If I can grow my account $10 per share more than you, I win. This is not about income or cap appreciation. Income is only truly income when you get it as an extra. If you give up $30 in share value in exchange for $20 in cash, that's a losing trade, not income.

 

[EVNow]

But watch this: what if I roll that -450CC I have down to -420C at that point? Suddenly I'll also have an $80 ITM CC, same as you, and $40 in cash ($10 from before and $30 from rolling 450 down to 420)

This is a valid point. Something OP can certainly consider doing.

 

[BornToFly]

dl003 has made some very good points. Another thing I was debating is not doing both at the same time. I can open the Jan 2025 +400/-420 now while the SP is low and it is only $2. Then do my normal weeklies for 0.2 and hope the SP climbs slowly. Then sell 450CC for what I could sell a 420CC now. Best of both worlds. The nice thing about doing the spread at this point, is that if the SP doesn't climb much in the next 6 months, or goes down, the Bull call spread I bought will still be worth about $2. At worst, I lose $1 closing it in 6 months if it looks like the SP will never reach 420. But if I wait and the SP starts rising, the cost to open the spread will increase.

 

[EVNow]

dl003 has made some very good points. Another thing I was debating is not doing both at the same time. I can open the Jan 2025 +400/-420 now while the SP is low and it is only $2. Then do my normal weeklies for 0.2 and hope the SP climbs slowly. Then sell 450CC for what I could sell a 420CC now. Best of both worlds. The nice thing about doing the spread at this point, is that if the SP doesn't climb much in the next 6 months, or goes down, the Bull call spread I bought will still be worth about $2. At worst, I lose $1 closing it in 6 months if it looks like the SP will never reach 420. But if I wait and the SP starts rising, the cost to open the spread will increase.

My view is that SP will go down before coming back up. I don’t know how market will react to Tesla not growing much next year.

 

[Knightshade]

My view is that SP will go down before coming back up. I don’t know how market will react to Tesla not growing much next year.

I think Tesla already told us on the Q3 call they expect lower growth next year so it shouldn't be a surprise?

Out of curiosity though I did a useless math thing-

Their Q3 2023 report shows installed production capacity at end of Q3 to be 2.35 million (and 3 of those numbers has a ># listing meaning capacity is higher than the number listed, though I ignored that to sum to the 2.35M)

Now as they note themselves in the graphic, installed capacity != current production rate due to downtime and other factors.

That said, out of curiosity, I looked back at the Q3 2022 installed capacity report.
It sums to 1.9M. The 1.8M Tesla expects to build in 2023 is 95% of the Q3 2022 installed capacity.
If we apply the same math to the Q3 2023 installed capacity we get 2,232,500 cars produced in 2024.
Which would be roughly 25-26% YoY growth if they hit the expected 1.8M this year.

 

[Max Plaid]

dl003 has made some very good points. Another thing I was debating is not doing both at the same time. I can open the Jan 2025 +400/-420 now while the SP is low and it is only $2. Then do my normal weeklies for 0.2 and hope the SP climbs slowly. Then sell 450CC for what I could sell a 420CC now. Best of both worlds. The nice thing about doing the spread at this point, is that if the SP doesn't climb much in the next 6 months, or goes down, the Bull call spread I bought will still be worth about $2. At worst, I lose $1 closing it in 6 months if it looks like the SP will never reach 420. But if I wait and the SP starts rising, the cost to open the spread will increase.

Or you buy the long call now, while they're cheap and then use those as the long leg in weekly diagonal spreads, which is what I'm now doing

 

[Jim Holder]

Or you buy the long call now, while they're cheap and then use those as the long leg in weekly diagonal spreads, which is what I'm now doing

Could it be they're so cheap now because 2024 will be a $200-$250 range year?

 

[Max Plaid]

Could it be they're so cheap now because 2024 will be a $200-$250 range year?

Well they're cheap because people aren't bidding them up, but +100% from here is a long way too, so makes sense

 

[dl003]

They are cheap because structure wise we are in a super twilight zone. Theres no telling if 175 or 300 will be next. Once mr. market has shown his card, the flow will follow. Up or down, we'll see. I had no issue calling 180 at 300 last year, 160 at 217 this year, 250 at 153, etc... you get my point. I can't call anything at this moment. So tread carefully. What I can see is, the upside, of which probability is unknown, has more room for the stock to go than the downside. We're talking about at least a 2:1 ratio between upside : downside. Until I call for the 3rd big leg down, don't get shaken out.

 

[thenewguy1979]

closed my call spread +235.50/-242 made .89 during the short pump to 236. hanging on my boatload of puts going into 226

 

[Jim Holder]

QTA Levels for today

11/24

12/1

 

[thenewguy1979]

iron condor play for next week.

delta play on both side is .20, so chance ITM either side is 20%. Win Loss ratio is 1:3. Wide breakeven. Safe play for kibble.

 

[Jim Holder]

50-day so close yet so far....

5-min

 

[BornToFly]

It feels like the Cyber FOMO is starting. I'm not selling any CCs for next week until next week (if I can resist).

 

[SpeedyEddy]

placed a bet BTO P 235 for today for a dollar, guessing we will fall from here into the close because of call wall 235
[edit] managing theta will be a thing... [/edit]

 

[Cherry Wine]

It feels like the Cyber FOMO is starting. I'm not selling any CCs for next week until next week (if I can resist).

Dipped my toe in the water for 10x 12/1 -c260s at $0.75, but that's all I'm doing for now. Will see if any attractive prices for $270+ show up before I add more.