Wiki Selling TSLA Options - Be the House

[Jim Holder]

IC is always 4

Iron Condor Options Strategy [Setup, Adjustments, Exit]

Iron condors capitalize on minimal stock movement, time decay, and decreasing volatility. Learn more with Option Alpha's free iron condor strategy guide.

optionalpha.com

Thank you.

When you do them for TSLA what spread do you set between the bottom two and top two?

Let’s say $210-$255 is the overall spread, what would 2 and 3 be?

1) 210
2) ?
3) ?
4) 255

 

[Musskiah]

Maximum-Pain shows Max pain for Jan 19 at 220. Where are you getting 210?

Several sites had it at $210 around 3pm when I looked. Stockninja still has it at $210. It appears it's being calculated at $220 by most sites now. Thank you for pointing it out, I will stand corrected. Most sites calculate Max Pain in $10 increments when there is such high open interest in contracts. I'm not sure why this is and remain open to understand it better, but I have Groked it. So depending on the averages, it will round up or down. As we seem to be fluctuating between $210 and $220, it would stand to reason the reality is more near $215. The general thesis stands that we stay well below the 200 DMA until end of Jan.

 

[Yoona]

Thank you.

When you do them for TSLA what spread do you set between the bottom two and top two?

Let’s say $210-$255 is the overall spread, what would 2 and 3 be?

1) 210
2) ?
3) ?
4) 255

you don't decide on the long and then guess the short

you decide on the short and then, depending on risk appetite and capital, decide the long

read the article?

be very careful with IC, it is for "Seasoned Veterans":

if you've somehow been successful the last 11 weeks, you will appear to be a genius; but actually, you just got lucky

TSLA makes much more violent weekly moves than the recent past

 

[Jim Holder]

you don't decide on the long and then guess the short

you decide on the short and then, depending on risk appetite and capital, decide the long

read the article?

be very careful with IC, it is for "Seasoned Veterans":
View attachment 1008141

if you've somehow been successful the last 11 weeks, you will appear to be a genius; but actually, you just got lucky

TSLA makes much more violent weekly moves than the recent past

View attachment 1008142

Thank you. I’ll read the attached article.

About your comment re caution needed with ICs, aren’t ICs supposed to be “safe” since the strikes are deliberately set outside of danger zones, or is it the volatility of TSLA that causes no plan really to be safe and demands strong initiating rules and constant monitoring?

 

[juanmedina]

In case it wasn’t dead enough, yeh, go ahead and kick the corpse just to make sure

I guess I’ll finally have a chance to practice selling my longs tomorrow and buy back at next stop below. Shame I don’t have any short calls active.

https://twitter.com/x/status/1745611288489664717

What are you thinking for tomorrow?

This is incredibly frustrating:

https://twitter.com/x/status/1745633047129600143

 

[Jim Holder]

What are you thinking for tomorrow?

This is incredibly frustrating:

https://twitter.com/x/status/1745633047129600143

I think it sells down more, possibly breaks $220 too. But gauging by the growing cacophony of frustration seemingly everywhere tells me we are closer to a bottom than we may think. It’s usually when sentiment is totally shot—the black after the darkness—that things turn around.

How to trade it smartly remains a puzzle for me (when I ask I’m told to make a pot roast ). It requires a different set of tactics than my regular short calls menu. I’m still learning the dance when we’re at the edge of a cliff. Sometimes perhaps best to do nothing at these times until there’s more clarity.

Sure I could have sold all my longs at $265 and rebought them here at $225 for a $240,000 win, but that’s easy to say in hindsight and not really realistic to catch the whole move. But if we start tanking tomorrow I will sell at least half my longs to try it out, even for just a few dollar scalp. I still wouldn’t feel comfortable being totally out over the 3-day weekend. Who knows what new might drop and spike a rebound (one can dream…).

 

[Singuy]

I think it sells down more, possibly breaks $220 too. But gauging by the growing cacophony of frustration seemingly everywhere tells me we are closer to a bottom than we may think. It’s usually when sentiment is totally shot—the black after the darkness—that things turn around.

How to trade it smartly remains a puzzle for me (when I ask I’m told to make a pot roast ). It requires a different set of tactics than my regular short calls menu. I’m still learning the dance when we’re at the edge of a cliff. Sometimes perhaps best to do nothing at these times until there’s more clarity.

Sure I could have sold all my longs at $265 and rebought them here at $225 for a $240,000 win, but that’s easy to say in hindsight and not really realistic to catch the whole move. But if we start tanking tomorrow I will sell at least half my longs to try it out, even for just a few dollar scalp. I still wouldn’t feel comfortable being totally out over the 3-day weekend. Who knows what new might drop and spike a rebound (one can dream…).

I thought most people sold calls here and should rejoice no? Or were people buying calls/selling puts instead recently?

 

[Jim Holder]

I thought most people sold calls here and should rejoice no? Or were people buying calls/selling puts instead recently?

Yes. I’ve been selling calls all the way down and profiting decently according to my appetite. I just went totally flat on short calls yesterday pre-CPI to de-risk and partially not expecting to break below $235, so I missed out on a nicer payday. And when it broke I didn’t want to chase down because of the chance it reverses quickly. So I bought a few LEAP calls and sold a few LEAP puts and sat on my hands otherwise.

Others here did much better indeed, like @tivoboy who had real conviction a few weeks ago about us being down here now and sold lots of deeper ITM calls than I’d ever dare. Also @Yoona, @dl003, and @Max Plaid played it very well as they shared with us here, and I’m sure others have too.

For me it’s also a win in my books that I didn’t put on any stupid trades that I would’ve regretted, like selling -P230 1/12/24 aggressively when we were at $250 several days ago. Not losing money and unwinding a month or two of gains is also a win.

At the end of the day, the best thing to remember is that the market will always be there and there will always be new trading opportunities. The past is the past. The future is waiting for us.

 

[juanmedina]

I thought most people sold calls here and should rejoice no? Or were people buying calls/selling puts instead recently?

Premiums are horrible right now. We already run out of short calls from $257 and by now we thought we were close to the bottom so personally I sold puts and bought LEAP's. I might sale most of my stock tomorrow and close everything no matter what, I keep thinking about how Elon said recently that Tesla will be more valuable than Apple and Aramco combined which to me it seems like a bad sign. Maybe the $180 target from Wicked stock will come sooner than later.

 

[Arul]

It is better to start with Short call sprerad and then progress. I am happy with my CC and making reasonable money.may be if i make good money in the first 6 months i may start short call spread to begin.

 

[Jim Holder]

Premiums are horrible right now. We already run out of short calls from $257 and by now we thought we were close to the bottom so personally I sold puts and bought LEAP's. I might sale most of my stock tomorrow and close everything no matter what, I keep thinking about how Elon said recently that Tesla will be more valuable than Apple and Aramco combined which to me it seems like a bad sign. Maybe the $180 target from Wicked stock will come sooner than later.

Bottoming speak ;- )

 

[thenewguy1979]

Come on guys. Im waiting for the fireworks tomorrow. Got my “buy too early jump the wagon +245c” expiring next week. $1000 Kibbles on the line. Not 300k but it feed for a year.

Wicked did mentioned a secondary support based on 216/217 on his video tonight.

If that broke 180 coming soon.

Let see what Tommorow bring.

 

[Arul]

I think it sells down more, possibly breaks $220 too. But gauging by the growing cacophony of frustration seemingly everywhere tells me we are closer to a bottom than we may think. It’s usually when sentiment is totally shot—the black after the darkness—that things turn around.

How to trade it smartly remains a puzzle for me (when I ask I’m told to make a pot roast ). It requires a different set of tactics than my regular short calls menu. I’m still learning the dance when we’re at the edge of a cliff. Sometimes perhaps best to do nothing at these times until there’s more clarity.

Sure I could have sold all my longs at $265 and rebought them here at $225 for a $240,000 win, but that’s easy to say in hindsight and not really realistic to catch the whole move. But if we start tanking tomorrow I will sell at least half my longs to try it out, even for just a few dollar scalp. I still wouldn’t feel comfortable being totally out over the 3-day weekend. Who knows what new might drop and spike a rebound (one can dream…)W

I think it sells down more, possibly breaks $220 too. But gauging by the growing cacophony of frustration seemingly everywhere tells me we are closer to a bottom than we may think. It’s usually when sentiment is totally shot—the black after the darkness—that things turn around.

How to trade it smartly remains a puzzle for me (when I ask I’m told to make a pot roast ). It requires a different set of tactics than my regular short calls menu. I’m still learning the dance when we’re at the edge of a cliff. Sometimes perhaps best to do nothing at these times until there’s more clarity.

Sure I could have sold all my longs at $265 and rebought them here at $225 for a $240,000 win, but that’s easy to say in hindsight and not really realistic to catch the whole move. But if we start tanking tomorrow I will sell at least half my longs to try it out, even for just a few dollar scalp. I still wouldn’t feel comfortable being totally out over the 3-day weekend. Who knows what new might drop and spike a rebound (one can dream…).

What about Wash sales if sells and then buy back?

 

[Jim Holder]

What about Wash sales if sells and then buy back?

One should speak to their tax advisor for their specific situation. Some of us are trading in a tax-free account. No two are the same.

 

[MikeC]

I thought most people sold calls here and should rejoice no? Or were people buying calls/selling puts instead recently?

Call sellers want flat to slightly up, not down hard. I had bought puts but sold them for tiny gain - my bullishness makes it impossible to hold onto them for long enough.

Gonna close my remaining -230c and 1/19 -235c tomorrow if we drop. Really trying hard not to sell any more CCs down here with ER coming up. Kinda tough to forego the income, though, especially when the stock is dropping.

 

[Max Plaid]

Back towards the end of December when we were trading around $260, I wrote, "now would be a good time to buy some July +p200's", but I didn't do it as I was on vacation and distracted, then the SP started to head south, meh! They were priced around $9 at that time

Anyway, back to the present, I fear this might get ugly - I don't expect much relief from the earnings in terms of margin and EPS, there's a strong chance that outlook will either disappoint or be deflected, and we have the ever-present spectre of Elon selling to fund his social-media addiction

So I'm looking anyway to buy some more puts, looking at June +p200's, as always will look to recuperate the premium with some weeklies, but in the short term I'm looking for protection

Still holding 100x 3/15 +p200's bought in October, but have written 1/26 -p220's, so want to 2x cover that as well as have a bit longer term coverage

Also looking to roll the Dec 2025 +c200's to June, which as of now would generate a -$240k paper loss, annoying, but would add a lot of peace-of-mind until I can offload the lot

 

[thenewguy1979]

If PPI come in hot we have a double whammy. If cool that could work to stabilize the punches.

This maybe the day we get that big move but not in the direction we wanted.

My plan is to hold onto next week long call in case this was the flush before the DCB. Wont have much values left anyway if we drop hard at opening so might as well hang onto them.

Be careful guys.

Edit - forgot big banks earning today as well.

 

[Max Plaid]

Wow, bears really going for it in PM... forget my previous post, I think the time for buying puts is over, will just deal with what I have and roll the -p220's down

Will probably look to buy back the 100x 1/26 -c240's I wrote, uhm, Wednesday!! And then go a little aggressive with 30x ATM for next week... not recommended for torahs as I do have 300x long positions I can write against in case of reversal

Be careful out there! Make sure you're covered

 

[Max Plaid]

More thoughts, am thinking to roll 100x 1/26 -c240 down to 70x -c220 to form 100x -220 straddle as I already have 30x -c220 and 100x -p220 for that expiry

Would that be reckless...? Given that I have 200x +c spare contracts to roll against...

I'm not acting out of "fear", I just cannot see an end to this for the moment and rolling those calls gives a break-even range 200 -> 240

Seems like a reasonable hedge in the current situation, obviously would close them out/roll BEFORE earnings if the premiums decay enough

It's 24/7 for the moment, eh?

 

[SpeedyEddy]

Yesterday I replied to @Right_Said_Fred that 217 is secured by the bottom line of the long term wedge.
But we should always remember the all-time-lowest line (red and white) which still is very much lower. So if we do not hold 217, all gap-ups below can become target, no worse than 140 presumably. But good news would not allow that to happen, world wide tensions exploding would.
[edit] P.S. 236-25% would be 202 (as a still viable MA4x target) [/edit]