Wiki Selling TSLA Options - Be the House

[juanmedina]

FWIW my IRA does not allow that. I can sell calls against shares, puts against cash, and buy calls and puts for cash- but not sell calls against calls (which is effectively a spread, and not allowed)

If I try I get "You are attempting to open a covered call for a quantity greater than the amount of underlying shares held"

(this is with ML, and I have the highest option level available for an IRA with them)

I am able to sell covered calls against ITM calls in my IRA's through E-trade.

Is anyone selling covered calls today? I been selling some for some lunch money.

 

[EV4win]

Hello. Newbie here.
I sold 8/6 710 covered call for 2.41 credit
I really don't want my shares to be called away given today's runup.
What's the best roll strategy?
Sorry for the newb question. Appreciate your help.

 

[Drezil]

Hello. Newbie here.
I sold 8/6 710 covered call for 2.41 credit
I really don't want my shares to be called away given today's runup.
What's the best roll strategy?
Sorry for the newb question. Appreciate your help.

- you could wait if the stock reverses tomorrow for .. you know .. the max pain
- you can roll out & up (i.e. 1-2 weeks out & up 10-20 bucks for 0.00 credit/debit) & continue that until they expire worthless => downside: no new CC against your shares in that time.
- get your shares called away & gain new ones by selling (itm) cash secured puts => this may have tax-implications
- buy 712.5 calls that will allow you to get those shares for the prices of 2.50 if the stock keeps hitting above => your credit of 2.41 will be sacrificed for that

 

[CHGolferJim]

Would I be nuts to sell $660 covered calls tomorrow for Friday? How much do I really believe in MaxPain?

Answered!

 

[EV4win]

- you could wait if the stock reverses tomorrow for .. you know .. the max pain
- you can roll out & up (i.e. 1-2 weeks out & up 10-20 bucks for 0.00 credit/debit) & continue that until they expire worthless => downside: no new CC against your shares in that time.
- get your shares called away & gain new ones by selling (itm) cash secured puts => this may have tax-implications
- buy 712.5 calls that will allow you to get those shares for the prices of 2.50 if the stock keeps hitting above => your credit of 2.41 will be sacrificed for that

Thanks much for the reply!
I'm quite attached to my shares, so I'll roll
Don't want to take my chances with Maxpain as when TSLA moves up, it rockets up

 

[UltradoomY]

Answered!

If you did - you could get quite the juicy premium now!

 

[CHGolferJim]

11 million shares traded by 11AM ($676, +$29, +4.5%) — let’s see if hourly volume and price hold up. Might do a couple ATM 0806C tomorrow (amongst other things) for giggles.

 

[Chenkers]

I actually sold 10 x 30Jul $675CC a bit after open this morning. But this was really a margin management play (I opened with margin -$130k) along with some rolls and a couple of bought puts. I'll see how these play out as the MM currently seem to want to cap below $680. And with the margin now healthy after the rise I've also sold around $10k worth of 620/645 705/730 IC's.

 

[Drezil]

How would you guys play the 20/8-expiration? I was just playing around a bit.

Thesis:
- Price will go up
- Max pain looks to me like ~740

Sounds like a broken-wing butterfly to me:
+670c, -2 730c, +760c.

then roll +670c -> 700c as soon as i get 13$ credit for it. This will turn the butterfly into a freefly.

Currently: 0 at 688, max-gain at 730 with 40$, 12$ gain above 760.
After rolling: 1$ gain everywhere, max-gain reduced to 30$.

Rolling should work with SP above 715 or so.

Any opinions?

I will wait with order placement as i hope that we still get a dip tommorow & then enter as cheap as possible.
at the moment 45% market implied POP, 2.3 return/risk. On a dip tomorrow this should read 20% POP, 5 return/risk .. then i can enter

 

[Drezil]

I actually sold 10 x 30Jul $675CC a bit after open this morning. But this was really a margin management play (I opened with margin -$130k) along with some rolls and a couple of bought puts. I'll see how these play out as the MM currently seem to want to cap below $680. And with the margin now healthy after the rise I've also sold around $10k worth of 620/645 705/730 IC's.

I just entered that for fun for me ..

10 of those (yielding ~1250 bucks) will cost me 40k margin ..

 

[CHGolferJim]

I actually sold 10 x 30Jul $675CC a bit after open this morning. But this was really a margin management play (I opened with margin -$130k) along with some rolls and a couple of bought puts. I'll see how these play out as the MM currently seem to want to cap below $680. And with the margin now healthy after the rise I've also sold around $10k worth of 620/645 705/730 IC's.

More complex than what I do, but I do notice that 0806C690 offer 4x the premium of 0730C690.

 

[Chenkers]

How would you guys play the 20/8-expiration? I was just playing around a bit.

I will personally wait till at least mid next week in case they decide to hold the annual shareholders meeting with AI day. If the 2 weeks notice for the meeting includes a resolution to increase shares for a split then who knows where the stock will go. If we get an IV rise I'll sell CC just prior for the IV crush.

 

[UltradoomY]

Pretty sure we will see the Annual meeting with AI day. Just makes sense, battery day last year had the meeting before.
I am looking at BPS' but definitely not interested in CC's since they could announce a split and rip everyone's faces off with it.
Right now a $625/$525 BPS is netting $10 a contract - if they push us lower tomorrow I will be opening these for probably $15 each instead.

 

[adiggs]

(rookie thinking) this i gotta try!

one can sell CC even though i don't have the shares yet? i am liking this idea of weekly prems paying down the initial debit

i am thinking to read this forum again from post #1 and take notes; there could be more gems i may have missed

thanks

This is what I've been doing and it works well. I uses farther ITM calls than mentioned, but this is what all of my CC are at this point. I use 300-500 strike long calls (I like those Jun '23s as well) - it lets me sell even more cc than I would otherwise, and I find that I am emotionally able to take assignment on these where I am not emotionally able to take assignment against shares.

Note that "take assignment" is an active thing I'll have to do - STC the long call and BTC the short call. But I can handle that.

Oh - and I can get a higher total delta via the DITM calls over shares - I just need to pay for the time value, and the sold calls handles that (and more).

 

[mickificki]

Bought two June 2023 $900 LEAPs late this AM to add to two held at 60% higher purchase price, and feel like a wimp after what I’ve read in this and the main thread this morning. Considering buying back 0730C710, but paying 50 cents for what will surely expire is holding me back. Hmmmm.

good call on the leaps!

 

[UltradoomY]

I feel like a silly goose. Earlier in May and June I did well with bought calls and rolling them out and up and thus have ended up with free (roll credits paid for them) December $700C
It hit me up side the head today after @Yoona and @adiggs said many times that I could sell LCC against these for even more free credit..... Jeez.
Just has to be higher than $700 - or even convert them to a spread and sell December $750's
It was right in front of me and I never saw it.....
Cheers

p.s. for accountability I did close my BPS for next week I opened on Tuesday for $1.50 each pretty nice. Frees up margin for tomorrow and another BPS to set up.

 

[Yoona]

This is what I've been doing and it works well. I uses farther ITM calls than mentioned, but this is what all of my CC are at this point. I use 300-500 strike long calls (I like those Jun '23s as well) - it lets me sell even more cc than I would otherwise, and I find that I am emotionally able to take assignment on these where I am not emotionally able to take assignment against shares.

Note that "take assignment" is an active thing I'll have to do - STC the long call and BTC the short call. But I can handle that.

Oh - and I can get a higher total delta via the DITM calls over shares - I just need to pay for the time value, and the sold calls handles that (and more).

can i please have a not-advice example for a dummy like me?

if sp right now is 675, buy a leap jun23 @400 then sell CC 8/6 for example at -c850?

thanks in advance!

 

[UltradoomY]

can i please have a not-advice example for a dummy like me?

if sp right now is 675, buy a leap jun23 @400 then sell CC 8/6 for example at -c850?

thanks in advance!

You would be able to sell the CC for anything over the $400 strike

 

[Buckminster]

Sounds like a broken-wing butterfly to me:
+670c, -2 730c, +760c.

Thats what I was going to say.

This will turn the butterfly into a freefly.

Okay you're making this up now...

 

[corduroy]

can i please have a not-advice example for a dummy like me?

if sp right now is 675, buy a leap jun23 @400 then sell CC 8/6 for example at -c850?

thanks in advance!

I'm sure adiggs can give a more detailed answer, but I can confirm I have been selling weekly CCs against that exact leap for about 6 months now (in an IRA account).