Wiki Selling TSLA Options - Be the House

[EVNow]

Playing the house vs playing the direction, it doesn't matter. If you make a lot of money, you'll be right. If you don't make any money, whatever label you want to be stuck with doesn't matter.

I made 7 figures in 2 months and lost it in the next two playing direction

Now I’ve to be satisfied making that much in a year playing house .. that too in a good year

 

[dl003]

I made 7 figures in 2 months and lost it in the next two playing direction

Now I’ve to be satisfied making that much in a good year playing house

That just means directional bets are high risk & high reward and not everybody should attempt it.

I have said it before and I will say it again. Selling options on a high conviction stock is easy mode so just because one can make consistent money does not give one any high moral ground. The fact that you are so bullish on a stock you will never sell makes selling calls almost like a cant lose strategy. Of course the stock has to appreciate over time or both puts and calls selling on it will quickly go bust. We on this board are blessed with a high conviction on TSLA, which makes us seem like geniuses to ourselves. Think about it:

If you sell calls and get run over, at least you are selling high. You can also just roll it out until its OTM. Since the stock always goes up in the long run, you will never fear being stuck with a worthless stock.

If you are stuck with an ITM puts, just roll it out or take assignment. As the stock goes up in the long run, you will be able to get out from under a losing short puts.

Yet, we often forget the fact that it is our inner TSLA bull who is writing checks that our inner wannabe TSLA trader squanders. Just because the foundation upon which we trade is so strong, we think we can just half-ass it and will eventually get bailed out by the fundamentals.

I am not here to half-ass anything. If the stock looks like it will go down, I will take on a short position. If it looks like it will go up, I will go more long. If I am wrong, I will learn from my mistakes.

I am confident that you and everyone who sells TSLA options with any decent amount of knowledge and risk management will make a very confortable living. However, once in a while, stop and ask yourself if that is because you are so skilled as a trader or just very good as a TSLA investor. Maybe to you, making free returns on a stock you are determined to hold on for life is good enough and people who try to get more out of it are nothing but delusional. For me, I have seen whats out there and how good someone can get with practice and determination.

 

[wooter]

next week 1/12 predictions

options market is guessing 225-250, about 5% move

View attachment 1006348

I also like looking back a week.

You would have been burned if you followed gamma walls or ATM straddle.

 

[juanmedina]

I've been thinking a lot about your strategy of scalping premium on longer dated Calls. This has probably worked well this week because the SP has been going down. I don't see it working well when the SP is rising, and for me, the premiums aren't good enough on something like a Jan 2025 350 Call. Am I wrong?

I was thinking exactly the same thing. Can you imagine selling LEAP's for low premium and than the stock goes on a run like in 2020. We have been consolidation for 2 years so we have been able to escape from a bad long trade. I assume people that got stuck selling calls in 2020 got their shares called away. I am ok with trying to scalp longer contracts one or two months out at strikes that I am ok with letting the shares go in the short term or scalping bought LEAP's but being stuck for 2 years doesn't sound fun. I am willing to take a huge bet on long term contracts when we are back at AH but not right now. Another thing is that this strategy only work in after tax accounts; most of my shares are in retirement account so I cannot sell and close contracts multiple times during the day or my accounts will be flagged.
Jim is killing it and I applaud him.

 

[BornToFly]

You have been overly bullish. You need to recognize that. You didn't sell calls on Tuesday as you saw TSLA was holding up well, or this morning for I don't know what the reason was. If you are forever haunted by the irrational fear of the SP shooting up out of nowhere, then a lot of strategies won't make sense to you because in your mind, the only direction the stock can take is up.

You are right, in that I'm overly bullish and always fear a huge run because I don't want to lose my shares. I did sell CC Friday morning at the open that were very aggressive by my old standards, but I went with Yoona's data. I ended up netting $18k for the week, which is not too bad (although I used to make 10X that easily in 2021/week before the SP tanked and my BPSs cost me 2/3 of my capital).

The main thing I'm trying to do now is sell more aggressive CCs on a pop early in the week with just a small percentage of shares. That gets me to 50% of my weekly target. If the SP goes up, I will use my other shares to write new CCs at higher strikes to bail out the ITM calls. If the SP stays in range, then I sell more CCs each day for less premium than the original to increase my weekly return. Obviously I will need to see how well this works if the SP goes on a big run.

 

[EVNow]

I also like looking back a week.

You would have been burned if you followed gamma walls or ATM straddle.

View attachment 1006486

Nobody talks about it when max pain doesn’t work. MMs don’t go bankrupt every time it doesn’t work because they delta hedge.

 

[EVNow]

I am confident that you and everyone who sells TSLA options with any decent amount of knowledge and risk management will make a very confortable living. However, once in a while, stop and ask yourself if that is because you are so skilled as a trader or just very good as a TSLA investor. Maybe to you, making free returns on a stock you are determined to hold on for life is good enough and people who try to get more out of it are nothing but delusional. For me, I have seen whats out there and how good someone can get with practice and determination.

It depends on your stage in life. If you want to make money to retire you take more risk. If you have taken the risk and already made enough to retire then you just want to preserve and grow capital while making some side money.

If I was 20 years younger, I’d be doing things differently.

Important thing is for @BornToFly to recognize that you can’t play be the house and compare returns to people betting on direction and making multiple trades a week. Sometime back I had written how we can get sucked in and progressively take more risk looking at all the money others are making.

 

[Yoona]

if there's a genius here, can someone pls scrape the page and reply back with maxpain data?

i only need the value of the blue dots, TIA!

Options Max Pain - Calculations for SPY

Our Max Pain calculator displays the aggregate nominal value of options premium expiring at each strike price, for each expiration.

swaggystocks.com

 

[thenewguy1979]

Different strokes for different folks. Whatever work best for you is “the” best strategy.

Good conversations on how and why we chooses our path and pro and con of each.

Would be great to hear what would be the best trading strategy to grow a small account. In other words based on what you know now, what would you do if you started with only $20k?

Me just a young silly dog trying to find his path.
Have a great weekend Team.

 

[Yoona]

Different strokes for different folks. Whatever work best for you is “the” best strategy.

Good conversations on how and why we chooses our path and pro and con of each.

Would be great to hear what would be the best trading strategy to grow a small account. In other words based on what you know now, what would you do if you started with only $20k?

Me just a young silly dog trying to find his path.
Have a great weekend Team.

Profiting with Small Account | Video Lesson | Option Alpha

Learn how you can still profit with a small account using these options strategies.

optionalpha.com

 

[willow_hiller]

if there's a genius here, can someone pls scrape the page and reply back with maxpain data?

i only need the value of the blue dots, TIA!

View attachment 1006540

Options Max Pain - Calculations for SPY

Our Max Pain calculator displays the aggregate nominal value of options premium expiring at each strike price, for each expiration.

swaggystocks.com

Their API hangs on the "1 YEAR" toggle option, so unfortunately best I can do is 6 month:

 

[Yoona]

Their API hangs on the "1 YEAR" toggle option, so unfortunately best I can do is 6 month:

WOWWW THANK YOUUUUUUU

 

[EVNow]

View attachment 1006552

Profiting with Small Account | Video Lesson | Option Alpha

Learn how you can still profit with a small account using these options strategies.

optionalpha.com

To emphasize the first point - Wicked Stocks recommends 1% of the account when buying options.

 

[thenewguy1979]

I found my niche just have to stick to it. Dont get greedy dont have small balls.

80% Selling safe ICs balancing margin vs risk

10% Directional move based on conviction using only money made from selling

10% reserved for dabbling into some other trading experiences - butterfly, scalping, etc…

Read and absorbs the team daily updates and executes. The collective minds here are much smarter then my single doggy head.

Some of the best people you can have in this journey are here. I do love you guys for what you have shared and helped - especially for this Silly dog.

Re- Quoting Jim

Making Money is Happiness
Making Money with Friends is Priceless

Edit - got to get out. I’ve been reading this forum more then any other books in my life combined nor have I written this much on a daily basis.

 

[dl003]

You are right, in that I'm overly bullish and always fear a huge run because I don't want to lose my shares. I did sell CC Friday morning at the open that were very aggressive by my old standards, but I went with Yoona's data. I ended up netting $18k for the week, which is not too bad (although I used to make 10X that easily in 2021/week before the SP tanked and my BPSs cost me 2/3 of my capital).

The main thing I'm trying to do now is sell more aggressive CCs on a pop early in the week with just a small percentage of shares. That gets me to 50% of my weekly target. If the SP goes up, I will use my other shares to write new CCs at higher strikes to bail out the ITM calls. If the SP stays in range, then I sell more CCs each day for less premium than the original to increase my weekly return. Obviously I will need to see how well this works if the SP goes on a big run.

we have more in common than you might have come to believe. When I decided the stock was for sure going to 265, what did I do? Sell 255 and 260 puts, ITM. When I decided the bounce after P&D was a dead cat, I sold 275Cs - 2SD away. We are both bullish on the stock and dont want to lose our shares.

I have a strategy that tells me when the stock is going to turn and the targets. A strategy is a system of measures and indicators that churns out results given a circumstance. Jim obviously has his own strategy that has led him to make profitable trades. When the stock is back in an uptrend, these indicators should prompt him to take trades in the other direction. Case in point: in the same post that you quoted, Jim said hed already taken a long position going into next week. Therefore, I took a bit of an issue with you suggesting his strategy wouldnt work in an uptrend and the only observation I could make was that you had made several calls that could be described as too bullish.
I was selling calls in 2020 and 2021 too and there was signs. I didnt lose my shares. Again, I was the one predicting 1000 SP by January 2022. To be aware of the danger is good, but even better is to learn about ways to detect it, which so far has garnered very little
interest. All I hear is its risky because its directional. Dangers can come from both sides, by the way. The things that help you predict a $10 today may very well help you predict a $200 move a year from now.

 

[thenewguy1979]

My play for next week.

Added a weekly butterfly play based on max pain. Cheap play. I just need to win 1 time to make up for a dozen losses.
The earlier the play is made the cheaper the price of entry.

The IC's. "Safe" to me. Closed at 50% win. No plan to roll to mitigate high margin.

 

[willow_hiller]

WOWWW THANK YOUUUUUUU

Thought of a quick Granger causality test to run on this data, FYI.

A couple of conclusions:

1. The SP is a greater predictor of the next max pain than max pain is a predictor of the next SP (the correlation we see is likely to be a reverse-causal relationship).
2. The relationship between the difference of the SP and max pain and the next movement in the SP is not large or statistically significant. In this dataset, every $1 difference between the SP and max pain changed the SP in the direction of the difference by about $0.02 the following trading day.

 

[Arul]

Looking ahead to next week 1/12 as of now. Maybe we see bounce off channel bottom toward $250's which I plan to sell into on the way up.

View attachment 1006345

sell into on the way up.means selling CC ?

 

[Arul]

1.51

amateurs

View attachment 1006188

Thanks i do only CC. and i like this kind of information in addition to yoonas gex and other nformation.

 

[intelligator]

View attachment 1006618

"Speaking for myself" that butterfly trade is interesting, I'll need to get more seat time before I try it on my own, seems to need oversight. I'll be selling the same call end of the IC, not sure I want to be so close to the put side but will look to open the put side first being we are slightly closer to it price wise, -p220 tops, most likely -p215 only if we get a good dip. Each side will be 30 wide.

Note to self: Last week I closed a position by not sticking to the plan. Much of it had to do with some time I needed for myself and family, no time to watch the ticker. Clearly, the spread was quite safe and as pointed out by several others, silly to have closed it at what I opened it when I could have clearly rolled it. Oh well, nothing earned, nothing lost.