Wiki Selling TSLA Options - Be the House

[AquaY]

Sure - last week I STO 1510 ($30 premium), 1515 ($25), 1520 ($30) SHOP puts expiring 8/13 - sold while the stock was dropping following an earnings beat (like TSLA). This morning, the stock popped $30 before being walked back down. I sold a portion of my positions for 85% profit, but since I have time on my side and believe the stock will continue to climb out of the 1500's kept a few to close for pennies on Friday. This weekly put example nets premiums worth $28K (10 total contracts).

Also on last week's weakness I sold some high premium ~monthly puts - Aug 27 1500 ($60) and Sept 10 1550 ($100). These I expect to close w/ 90% profits in the next week or two as the stock makes its way back to the $1600's - these generated $52K in premiums for 6 contracts.

I haven't opened TSLA puts this week because of the relative margin use (IBKR margin req's are much higher for TSLA) and SHOP had the red momentum opportunity. If TSLA has a few red days then I'll take advantage of the momentum with TSLA.

Those are some nice premiums.
I use Etrade and the margin used to make similar trades between TSLA and SHOP seems about the same.
To sell the equivalent TSLA puts I'd have to do about twice as many ( 21 TSLA vs 10 SHOP) to commit the same amount of margin, and the same amount of cash if they were exercised. I looked at some options for Aug 21 expiration and using similar IV and TA of stock price probabilities I found them to be pretty similar with SHOP doing somewhat better. A little more premium and a little better risk. But very close.

Of course I did this very quickly and would have to spend some time running some trades but it seems like a nice diversification even if I don't yet see the far higher premiums and margin requirements as you've experienced.
Always great to have options when trading options!

 

[Yoona]

Sure - last week I STO 1510 ($30 premium), 1515 ($25), 1520 ($30) SHOP puts expiring 8/13 - sold while the stock was dropping following an earnings beat (like TSLA). This morning, the stock popped $30 before being walked back down. I sold a portion of my positions for 85% profit, but since I have time on my side and believe the stock will continue to climb out of the 1500's kept a few to close for pennies on Friday. This weekly put example nets premiums worth $28K (10 total contracts).

Also on last week's weakness I sold some high premium ~monthly puts - Aug 27 1500 ($60) and Sept 10 1550 ($100). These I expect to close w/ 90% profits in the next week or two as the stock makes its way back to the $1600's - these generated $52K in premiums for 6 contracts.

I haven't opened TSLA puts this week because of the relative margin use (IBKR margin req's are much higher for TSLA) and SHOP had the red momentum opportunity. If TSLA has a few red days then I'll take advantage of the momentum with TSLA.

8/13 SHOP max-pain 1537 and highest put 1500

To get a feel of SHOP, i STO 8/13 CSP -p1500 $1100 credit, 27 delta; margin req't only 35%

I don't mind owning the stock if ITM. I'll turn it into a Wheel.

 

[Xepa777]

This thread has been immensely helpful as I've learned to trade options over the past 8-12 months. With the help of this group and a dear friend I started trading with TSLA options and learned that there is money to be made by augmenting my position, if you pay attention.

To me, options trading TSLA, even the simple selling of puts and calls, is a 3D matrix of options to offset risk and take profits. Sell on momentum (opening positions or rolling from put to call), stack timing strategies (weekly, monthly, quarterly) to capture IV, and sell/re-buy to maximize use of cash or margin.

While the above has made me LOTS of money, I've discovered a 4th dimension that I'm surprised I haven't seen discussed here. The lack of discussion may be because this is a TSLA forum, and if that's the only reason I apologize for where I'm about to take this. BUT, I've discovered a new level of optionality (rolling, rescuing, opposing momentum) by introducing a second ticker into my options strategy.

For me that ticker is SHOP, Shopify, a high growth e-commerce platform that is growing like TSLA but due to the nature of their SaaS business get much smoother recognition from the street for performance (or out-performance). The stock is low volume, high IV, massive premiums, and in a sector that has many beneficial and different traits to that of Tesla.

With the same margin (my weapon of choice) as a handful of Tesla puts I can sell 30-40% more SHOP puts at 2-3x the premium. I have a similar long term belief in Shopify's success as I do in Tesla; their anti-Amazon model that is powering massive businesses like Netflix (merch) but scales all the way down to the smallest mom & pop shop. Add in that my friends in the executive ranks at Amazon have admitted the company has no answer to Shopify and sees them as their biggest threat - and well I feel pretty good about the future of Shopify.

Whether you all decide to augment your TSLA strategy with SHOP or some other ticker is not important to me. I'm not here to pump SHOP. But I have gained so much value from this group that I wanted to share the insights I've discovered by expanding my matrix of options with another ticker. I can now roll a bad TSLA move into a SHOP play, rescue the value, and avoid wash sale rules to book losses if a non-macro catalyst causes a TSLA position to go deep ITM quickly. I'm sure I've only scratched the surface of the benefits, but my options matrix has gone orthogonal since this discovery.

The only downside I can find is that this strategy requires more time - time to research, time to track SHOP business leaders, time to read earnings, and time to stay on stop of stock price movements. That's time well spent for the >2x gains in options premium I've benefitted from since expanding my horizons.

Happy to discuss or hear opposing view points from this group.

i mainly sell puts on margin against MSTR now as well. The premiums are insane because MSTR has bitcoin volatility built into it. Mainly just sell covered calls on Tesla now

 

[KTC Lurker]

i mainly sell puts on margin against MSTR now as well. The premiums are insane because MSTR has bitcoin volatility built into it. Mainly just sell covered calls on Tesla now

I'll have to check it out - the predictability of SHOP being similar to TSLA (up) over a relatively long timeframe is why I like it. Have you found MSTR to have any predictability?

 

[Tslynk67]

Cleared the decks yesterday of the $740 and $760 at a cost of 16% of the premium, although it looks like there would have been plenty of time to do that today at slightly better prices. Expect the $780 to expire. In a bit of a quandary about next moves (since I only buy and sell calls) with all the upcoming events and possible spike up. However, over the past 2 months it has always paid to be aggressive and roll when needed, so it’s probably a matter of figuring out strike and date to STO. What I looked at yesterday was <$5 for 10 days and <$9 for 2 1/2 weeks which is pretty puny. Maybe make a move today or tomorrow and take what is available for logical targets. Can always roll up if there is a SP and price spurt.

You're getting pretty good at the covered calls, Jim! Something I'm bit crap at in general, have to make up the numbers with my kamikaze puts

 

[CHGolferJim]

You're getting pretty good at the covered calls, Jim! Something I'm bit crap at in general, have to make up the numbers with my kamikaze puts

Now you're making me nervous, lol.

 

[juanmedina]

i mainly sell puts on margin against MSTR now as well. The premiums are insane because MSTR has bitcoin volatility built into it. Mainly just sell covered calls on Tesla now

I follow on of your trades with MSTR and I did good. Jesus the premiums are good. 10% OT for this Friday is paying $6.55 on the call side and is down 50% already lol. A $960 call is worth $1.10 and the SP is at $760... Tesla should have those kind of premiums lol. How are you picking the strikes on MSTR? how far OTM or what delta.

I made $530 from a BPS that I opened last week other than that I haven't sold a single call this week .

 

[Tslynk67]

This thread has been immensely helpful as I've learned to trade options over the past 8-12 months. With the help of this group and a dear friend I started trading with TSLA options and learned that there is money to be made by augmenting my position, if you pay attention.

To me, options trading TSLA, even the simple selling of puts and calls, is a 3D matrix of options to offset risk and take profits. Sell on momentum (opening positions or rolling from put to call), stack timing strategies (weekly, monthly, quarterly) to capture IV, and sell/re-buy to maximize use of cash or margin.

While the above has made me LOTS of money, I've discovered a 4th dimension that I'm surprised I haven't seen discussed here. The lack of discussion may be because this is a TSLA forum, and if that's the only reason I apologize for where I'm about to take this. BUT, I've discovered a new level of optionality (rolling, rescuing, opposing momentum) by introducing a second ticker into my options strategy.

For me that ticker is SHOP, Shopify, a high growth e-commerce platform that is growing like TSLA but due to the nature of their SaaS business get much smoother recognition from the street for performance (or out-performance). The stock is low volume, high IV, massive premiums, and in a sector that has many beneficial and different traits to that of Tesla.

With the same margin (my weapon of choice) as a handful of Tesla puts I can sell 30-40% more SHOP puts at 2-3x the premium. I have a similar long term belief in Shopify's success as I do in Tesla; their anti-Amazon model that is powering massive businesses like Netflix (merch) but scales all the way down to the smallest mom & pop shop. Add in that my friends in the executive ranks at Amazon have admitted the company has no answer to Shopify and sees them as their biggest threat - and well I feel pretty good about the future of Shopify.

Whether you all decide to augment your TSLA strategy with SHOP or some other ticker is not important to me. I'm not here to pump SHOP. But I have gained so much value from this group that I wanted to share the insights I've discovered by expanding my matrix of options with another ticker. I can now roll a bad TSLA move into a SHOP play, rescue the value, and avoid wash sale rules to book losses if a non-macro catalyst causes a TSLA position to go deep ITM quickly. I'm sure I've only scratched the surface of the benefits, but my options matrix has gone orthogonal since this discovery.

The only downside I can find is that this strategy requires more time - time to research, time to track SHOP business leaders, time to read earnings, and time to stay on stop of stock price movements. That's time well spent for the >2x gains in options premium I've benefitted from since expanding my horizons.

Happy to discuss or hear opposing view points from this group.

Very interesting indeed!

The first question that springs to mind when I consider trading other stocks is that I don't know anything about these companies, their products, the outlook, the sentiment, the shorty situation etc. So from that perspective I'd feel uncomfortable. On the other hand, I'm not sure that knowing every time Elon farts has ever made that much difference to $TSLA stock movements - maybe it's all just luck...

If you see what I mean...?

tl;dr - does't knowing zero about the stock change your strategy?

 

[KTC Lurker]

Very interesting indeed!

The first question that springs to mind when I consider trading other stocks is that I don't know anything about these companies, their products, the outlook, the sentiment, the shorty situation etc. So from that perspective I'd feel uncomfortable. On the other hand, I'm not sure that knowing every time Elon farts has ever made that much difference to $TSLA stock movements - maybe it's all just luck...

If you see what I mean...?

tl;dr - does't knowing zero about the stock change your strategy?

Your point is taken and was my hesitation as I slowly waded in. However, the Shopify leaders are active on Twitter (Tobi Lutke and Harley Finkelstein) and their earnings reports are readily available on the IR site (Shopify - Home). There's no investor community quite like this one, which I think and hope will change with time - so that is missing.

My long term outlook is based on some well considered emerging trends: Consider that all kids want to be influencers, all influencers want to own their future irrespective of platform (YouTube, Twitter, IG), the best influencers have captured the lions share of their value (Kylie Jenner, Rhianna, etc) by branding and selling their own products (skipping the corporate sponsorships and instead making $B's selling their own goods), and all of the above use Shopify to do that with little-no headcount required to scale. To me, distributed e-commerce infrastructure empowering anyone to sell goods as well or better than Amazon is nearly as certain to be successful as BEV's, stationary storage or AI. Oh, and like Tesla it crosses borders seamlessly, another thing the incumbent can't do.

 

[TheTalkingMule]

Sorry if this is OT to the thread and more of a general options question.

@Knightshade was pointing out this morning it's best to monetize the MMD via options for leverage. Certainly makes sense and I fully understand the basic(non-spread) aspects of options. I'm thinking about getting started with actual cash and just want to make sure my strategy is near optimal. Also would be interested in ways to similarly attack the MMD but maybe with something less than total risk.

SP today immediately made a beeline for $705. Nothing new, we see this MMD action on more days than we don't. I want to simply buy calls near the bottom and sell at the recovery. I understand being wrong here means a total loss, but I'm fairly confident in targeting only the most obvious soon-to-recover MMD's.

Today for instance......at 10:20am with SP sitting at $703-705 an 8/13 $705c was priced around $8.30-9.00, then by 12:20 had recovered to $16. If I focus most heavily on Mon/Tues/Wed MMD's, I have to think I can squeeze out a reliable profit and perhaps hit some home runs. Any not-advice other than the obvious caveats of this being an obvious strategy that's very very hard to get right in a notoriously irrational and manipulated market? Should I get more complex to limit losses when wrong? Only buy slightly ITM calls? Only buy slightly OTM calls? Intra-week expirations vs slightly further out?

Thanks for any help. This thread is phenomenal.

 

[stealthyc]

Sorry if this is OT to the thread and more of a general options question.

@Knightshade was pointing out this morning it's best to monetize the MMD via options for leverage. Certainly makes sense and I fully understand the basic(non-spread) aspects of options. I'm thinking about getting started with actual cash and just want to make sure my strategy is near optimal. Also would be interested in ways to similarly attack the MMD but maybe with something less than total risk.

SP today immediately made a beeline for $705. Nothing new, we see this MMD action on more days than we don't. I want to simply buy calls near the bottom and sell at the recovery. I understand being wrong here means a total loss, but I'm fairly confident in targeting only the most obvious soon-to-recover MMD's.

Today for instance......at 10:20am with SP sitting at $703-705 an 8/13 $705c was priced around $8.30-9.00, then by 12:20 had recovered to $16. If I focus most heavily on Mon/Tues/Wed MMD's, I have to think I can squeeze out a reliable profit and perhaps hit some home runs. Any not-advice other than the obvious caveats of this being an obvious strategy that's very very hard to get right in a notoriously irrational and manipulated market? Should I get more complex to limit losses when wrong? Only buy slightly ITM calls? Only buy slightly OTM calls? Intra-week expirations vs slightly further out?

Thanks for any help. This thread is phenomenal.

Delta represents how much the option price will move if the underlying moves $1. The farther ITM the closer to 1 it will be. Also the more ITM the less leverage you can achieve with a given amount of capital. So it's really up to you to find the balance that suits your goals. Assuming you are truly day trading, the expiry date probably doesn't matter too much, however the closer you are to expiry the faster the time value decays, which would be not to your advantage if you are buying calls.

Personally I think the MMD is not as common or perhaps a better way to put it is not as well-defined as people make it out to be (look at the 10 day chart and tell me how many obvious MMD you would trade)

 

[LN1_Casey]

Sold a $720 call this morning for expiry this week for a nifty $6.30. The max pain is currently sitting at $700, and it seems fairly sticky to 710-715.

I should have done this yesterday, but I was busy all morning and then market was closed. Today I happened to be up early, so took advantage. Not the high point of the day, but close.

Knowing my luck this will be the week that the split is announced, so y'all welcome if that happens.

 

[Knightshade]

8/13 SHOP max-pain 1537 and highest put 1500

To get a feel of SHOP, i STO 8/13 CSP -p1500 $1100 credit, 27 delta; margin req't only 35%

I don't mind owning the stock if ITM. I'll turn it into a Wheel.

Followed this trade.

Currently down 75%

Thanks! I hate it!

 

[AquaY]

Followed this trade.

Currently down 75%

Thanks! I hate it!

Ouch

 

[Buckminster]

This thread has been immensely helpful as I've learned to trade options over the past 8-12 months. With the help of this group and a dear friend I started trading with TSLA options and learned that there is money to be made by augmenting my position, if you pay attention.

To me, options trading TSLA, even the simple selling of puts and calls, is a 3D matrix of options to offset risk and take profits. Sell on momentum (opening positions or rolling from put to call), stack timing strategies (weekly, monthly, quarterly) to capture IV, and sell/re-buy to maximize use of cash or margin.

While the above has made me LOTS of money, I've discovered a 4th dimension that I'm surprised I haven't seen discussed here. The lack of discussion may be because this is a TSLA forum, and if that's the only reason I apologize for where I'm about to take this. BUT, I've discovered a new level of optionality (rolling, rescuing, opposing momentum) by introducing a second ticker into my options strategy.

For me that ticker is SHOP, Shopify, a high growth e-commerce platform that is growing like TSLA but due to the nature of their SaaS business get much smoother recognition from the street for performance (or out-performance). The stock is low volume, high IV, massive premiums, and in a sector that has many beneficial and different traits to that of Tesla.

With the same margin (my weapon of choice) as a handful of Tesla puts I can sell 30-40% more SHOP puts at 2-3x the premium. I have a similar long term belief in Shopify's success as I do in Tesla; their anti-Amazon model that is powering massive businesses like Netflix (merch) but scales all the way down to the smallest mom & pop shop. Add in that my friends in the executive ranks at Amazon have admitted the company has no answer to Shopify and sees them as their biggest threat - and well I feel pretty good about the future of Shopify.

Whether you all decide to augment your TSLA strategy with SHOP or some other ticker is not important to me. I'm not here to pump SHOP. But I have gained so much value from this group that I wanted to share the insights I've discovered by expanding my matrix of options with another ticker. I can now roll a bad TSLA move into a SHOP play, rescue the value, and avoid wash sale rules to book losses if a non-macro catalyst causes a TSLA position to go deep ITM quickly. I'm sure I've only scratched the surface of the benefits, but my options matrix has gone orthogonal since this discovery.

The only downside I can find is that this strategy requires more time - time to research, time to track SHOP business leaders, time to read earnings, and time to stay on stop of stock price movements. That's time well spent for the >2x gains in options premium I've benefitted from since expanding my horizons.

Happy to discuss or hear opposing view points from this group.

I was thinking about selling options on non-TSLA. Didn't know where to start. Thank you!
Sold 5 P660 MSTR for next week
Sold 5 P1450 SHOP for next week

Happy with both having looked at the open interest charts as being low risk.

Let me know if you want me to setup a thread for non-TSLA Option selling or keep it all in one place.

 

[adiggs]

The notion of a 2nd (or more) underlying is a good one. My own approach a year ago when I started the thread was that I don't know any other companies well enough to try something like that. I still don't, but I'm not fundamentally opposed. In fact having another underlying sounds like it'd be good for diversification. I appreciate the SHOP mention - I may do some research there.


I closed out my Monday CC this morning when the shares were down around $9. The position earned about 60% overnight and that's good by me. Actually I closed out the aggressive CC for this week (725s) but left the 740s for next week on.

I then opened up another bucket or 3 of BPS. This time I went for some minor variety as I'm looking to try a range of things on the BPS side to see which ones I like the best. My 'standard' position would be 575/675s and I have a bunch of those.

I also opened 'aggressive' ones at 590/690. My thinking here is that I think 700 will be firm support - I was even thinking of going 695. I am also somewhat hoping for a pull back that puts these ITM - I want to evaluate what rolling these would look like - how much strike improvement I can get on a roll as well as how much incremental credit can be earned, stuff like that.

I also opened some 595/675s ($80 spread vs. my standard of $100). I used the smaller spread size to sell more of these. With the low IV the spread credit is practically the same between these two and probably wouldn't change much with a $50 spread size either. At least not the current week, and maybe not next week either.

All of these positions are for next week expiration - the difference in the spread sizes was >2x between this week vs. next week. There is a part of me thinking that I should have put everything at the 690, 695, or even 700 strike (practically ATM), as I consider the odds of a move up over the balance of this week to be high. Then I reminded myself that this is for income and that I've earned 1/2 of this quarter's income in the last week, and decided that was more aggressive than I need to be.


I've got more than 1/2 of my CC slots open right now. These are all 'aggressive' slots that I'll look to reopen on the first sign of strength. If we're ahead $20 or $30 tomorrow morning then they'll be on

 

[JustMe]

Sold a $720 call this morning for expiry this week for a nifty $6.30. The max pain is currently sitting at $700, and it seems fairly sticky to 710-715.

I should have done this yesterday, but I was busy all morning and then market was closed. Today I happened to be up early, so took advantage. Not the high point of the day, but close.

Knowing my luck this will be the week that the split is announced, so y'all welcome if that happens.

Wow that’s cutting it close. A two word enigmatic tweet from Elon could send this stock up $20 in a couple of hours.

Worst case scenario, you roll up and out and wait it out for a few weeks, I guess.

 

[juanmedina]

Sorry if this is OT to the thread and more of a general options question.

@Knightshade was pointing out this morning it's best to monetize the MMD via options for leverage. Certainly makes sense and I fully understand the basic(non-spread) aspects of options. I'm thinking about getting started with actual cash and just want to make sure my strategy is near optimal. Also would be interested in ways to similarly attack the MMD but maybe with something less than total risk.

SP today immediately made a beeline for $705. Nothing new, we see this MMD action on more days than we don't. I want to simply buy calls near the bottom and sell at the recovery. I understand being wrong here means a total loss, but I'm fairly confident in targeting only the most obvious soon-to-recover MMD's.

Today for instance......at 10:20am with SP sitting at $703-705 an 8/13 $705c was priced around $8.30-9.00, then by 12:20 had recovered to $16. If I focus most heavily on Mon/Tues/Wed MMD's, I have to think I can squeeze out a reliable profit and perhaps hit some home runs. Any not-advice other than the obvious caveats of this being an obvious strategy that's very very hard to get right in a notoriously irrational and manipulated market? Should I get more complex to limit losses when wrong? Only buy slightly ITM calls? Only buy slightly OTM calls? Intra-week expirations vs slightly further out?

Thanks for any help. This thread is phenomenal.

I guess you can try to buy the call at MMD and set an "exit strategy" order. E-trade will set a stop order if things go south and a limit order to take profits. I am starting to do that on short term options that I buy because I am terrible at talking profits and cutting my losses. Since I am holder at heart I like to watch the call go to zero.

I was thinking about selling options on non-TSLA. Didn't know where to start. Thank you!
Sold 5 P660 MSTR for next week
Sold 5 P1450 SHOP for next week

Happy with both having looked at the open interest charts as being low risk.

Let me know if you want me to setup a thread for non-TSLA Option selling or keep it all in one place.

I think we should open another thread for non-TSLA Option selling. I am a little hesitant to sell options of other stock because I got in trouble before with QS chasing premiums. I guess at least SHOP is a quality stock.

 

[TheTalkingMule]

Personally I think the MMD is not as common or perhaps a better way to put it is not as well-defined as people make it out to be (look at the 10 day chart and tell me how many obvious MMD you would trade)

Yeah, it's not easy. But I think I have a pretty firm grasp of when a drop at the open will turn into a traditional MMD with 2-3% swing from trough to recovery.

I don't day trade, just want a system I can turn to when I see an obvious MMD developing. My assumption is I'd need to be right about 30% of the time to break even, and at 50% right I'd make a killing. Not easy, but doable if I only do it when "absolutely certain". Perhaps I'll stay on the sidelines a few more weeks, do a trial run, and report back.

 

[corduroy]

To me having deep knowledge of the underlying is a huge competitive advantage over other traders. That is why I feel more comfortable with option positions in Tesla. Also, the fact I support the mission and want to accumulate shares if assigned. There is no other stock with this combination for me. I could never devote the amount of time that I study TSLA to another stock.

That being said, I also dabble in some other options. I sell puts and calls against ARKK. It's fairly low premiums, but as my second largest holding, I know it pretty well and have been watching it for a long time so I know how it moves. I've also sold puts to enter some new positions, and have some assorted LEAPs for YOLO/entertainment purposes.