Wiki Selling TSLA Options - Be the House

[Max Plaid]

Looking for some not financial advice / input.

I think I have the situation properly sorted but It would be nice to get some input from people who are more experienced.

I sold some NVDA calls at the start of the year for FAR OTM strikes. They expire in December. Since then as the stocks been going up (170% to be exact) I've been rolling them up and selling puts to offset the premium costs. This works until it doesn't, as we've all experienced with TSLA. If this stock falls things could quickly go south so I'm hesitant in continuing the strategy. Here is how my portfolio looks with regards to NVDA positions

Long
6500 Shares

Short Expiry December 2024
10 x 130 Calls
20 x 140 Calls
60 x 150 calls
20 x 85 puts

Short Expiry December 2025
50 x 83 puts

As you can see there are naked calls here. All puts are safe and I can fund them with cash.

The way I see it is as NVDA rises towards 200 (Which it shouldn't break by end of year or even get to) I'll be short 2500 shares at $150. So my losses will start racking up from there. If I want access to more profits I could roll my 150's up and sell more puts but my hesitancy in doing that is the put premium at "safe" strikes is starting to get thin which means I would have to sell more contracts and my hesitancy in doing that stems from our lessons we learned from TSLA. Fool me once shame on you, fool me twice shame on me. So personally I'm thinking I stick with my current position or perhaps roll a small portion of the 150 calls to 160 and sell another 20 or so puts at a "safe" strike.

Advice or comments would be appreciated.

No spreads please lol.

Agree with @dl003, you need to get out of the naked calls... not that many of those at least...

When you say you start to accrue "losses" above 200, you actually mean you'll start to cap you gains, no, there's no losses as such, other than the nakeds?

The -p83's, why not roll those up to a higher strike to cover buying back the naked calls?

NFA

 

[Max Plaid]

sorry!!!! i will be in poland then munich then go on cruise

View attachment 1057618

Oh, too bad. That's a lot of Europe travelling you do - pleasure or the "day job"?

 

[Yoona]

You nailed it (12, 1, smae thing) - nice !!! What indicators were you trending to have confidence in an upcoming shift? Was it the anticipated bond market readout?

lucky guess?

Oh, too bad. That's a lot of Europe travelling you do - pleasure or the "day job"?

overdue vacation

Looking for some not financial advice / input.

I think I have the situation properly sorted but It would be nice to get some input from people who are more experienced.

I sold some NVDA calls at the start of the year for FAR OTM strikes. They expire in December. Since then as the stocks been going up (170% to be exact) I've been rolling them up and selling puts to offset the premium costs. This works until it doesn't, as we've all experienced with TSLA. If this stock falls things could quickly go south so I'm hesitant in continuing the strategy. Here is how my portfolio looks with regards to NVDA positions

Long
6500 Shares

Short Expiry December 2024
10 x 130 Calls
20 x 140 Calls
60 x 150 calls
20 x 85 puts

Short Expiry December 2025
50 x 83 puts

As you can see there are naked calls here. All puts are safe and I can fund them with cash.

The way I see it is as NVDA rises towards 200 (Which it shouldn't break by end of year or even get to) I'll be short 2500 shares at $150. So my losses will start racking up from there. If I want access to more profits I could roll my 150's up and sell more puts but my hesitancy in doing that is the put premium at "safe" strikes is starting to get thin which means I would have to sell more contracts and my hesitancy in doing that stems from our lessons we learned from TSLA. Fool me once shame on you, fool me twice shame on me. So personally I'm thinking I stick with my current position or perhaps roll a small portion of the 150 calls to 160 and sell another 20 or so puts at a "safe" strike.

Advice or comments would be appreciated.

No spreads please lol.

there is no such thing as "safe" puts, especially on a long time horizon

"The way I see it is as NVDA rises towards 200" - if you are bullish, perhaps buy 25 LEAPS? BTC the puts can release the buying power?

but i agree, NO naked calls and there is a risk of getting inverted strangles

you can also fix the 25 one at a time... BTC the puts and use that cash to fix ONE -c; rinse/repeat... solution doesn't have to be NVDA (ie look at large SMCI prems)

at some point, nvda WILL get correction ; use that to buy out -c

 

[MrMoo]

Thanks for some of the feedback folks. Lucky for me I have an extra day to think it all over. If the wise folks seem to think there are too many nakeds/they are risky. Then I shall work on solving that problem first. I'm thinking I'll work on cutting half of them now and perhaps wait for a profit taking/correction to fix the other half. If it never comes well.... we'll see how things go then.

Agree with @dl003, you need to get out of the naked calls... not that many of those at least...

When you say you start to accrue "losses" above 200, you actually mean you'll start to cap you gains, no, there's no losses as such, other than the nakeds?

The -p83's, why not roll those up to a higher strike to cover buying back the naked calls?

NFA

Sorry I should have clarified I would start to accrue "losses" above 150 due to the nakeds. I felt like 200 may be a cap for the end of the year as it's a pretty big psychological barrier + Market cap so I thought with the nakeds my losses could be capped at 125k or so (if 200 holds by end of year). But it's guess work, what do i know.

 

[juanmedina]

NVDA at $200 would essentially a $5T company . I though $3T was not possible and look where we are.

 

[dl003]

the best thing to do is consolidate all your calls into 65 short calls so that you are not naked on anything, then we can talk TA.

by consolidating, I dont mean to cut losses on some of them. I'd just do something like this
So you pay $2600 total and end up with 65x -130C.

That will put an end to your worry about losses racking up on the upside and having to take unneccessary risks on the downside.

Sure, if the stock ends the year below 150 you will have left some money on the table, but you are way too close to the money and too much time is left to be thinking about profit now. plus, selling at 130 is not the end of the world.

 

[MrMoo]

by consolidating, I dont mean to cut losses on some of them. I'd just do something like this
So you pay $2600 total and end up with 65x -130C.

That will put an end to your worry about losses racking up on the upside and having to take unneccessary risks on the downside.

Sure, if the stock ends the year below 150 you will have left some money on the table, but you are way too close to the money and too much time is left to be thinking about profit now. plus, selling at 130 is not the end of the world.View attachment 1057804

Hmm the greed in me is wanting to do another strategy, essentially rolling out my
Short Expiry December 2025
50 x 83 puts

To $85 December 2026. Which will raise some cash + $7k of my own cash to buy back 20 contracts of the 150 strike. Leaving 5 contracts naked.

I can choose to do something with the 5 contracts if the stock pulls back. If we do remain above 130 or 140 by end of year i'll lose 3000 shares at that price range. So I can probably roll some of those December 2026 contracts forward with a much higher strike price to speed up the theta decay.

Just what I've been playing with in my head. It's a greedier play but 2025, 2026 whats the difference? Lol.... What could go wrong!?

 

[Jim Holder]

MORGAN STANLEY NOTE

June 18, 2024 01:09 PM GMT
Tesla Inc | North America

Master Plan 4 = ABC: Anything But Cars.
Elon teased Master Plan 4 (MP4) which will outline the next strategic phase of Tesla's scientific and business evolution. Ok, Tesla will still make cars, but we think investors should prepare for something else.

•Elon Musk seems to have acknowledged that China may have 'won' the battle for affordable traditional EVs.

•Al and robotics are entering a new and highly unusual phase, opening up new TAMs and moving the company deeper into new disciplines.

•We expect MP4 to be underpinned by Tesla's commercial ambitions in Al, robotics, hybrid compute including distributed thermal and compute in the car) that spans from cloud to edge.

•Investors should prepare for MP4 to more conspicuously connect Tesla with Elon's other controlled enterprises such as SpaceX/Starlink, X and xAl.

•The car is to Tesla what the video game chip is to Nvidia. The car is to Tesla what selling books is to Amazon.

•The auto business still matters to Tesla, but over the next 6 to 12 months, we think it may matter less to Tesla's fundamentals and valuation due to a combination of subtraction (weaker EV market) and addition (new product categories).

•We expect MP4 to be focused on autonomy in a broader sense than just robotaxis. An autonomous car is a rather simple robot with just 3 primary areas of manipulation (steering, accelerator, brake). There are many other form factors.

•Humanoid robots are having a 'moment.' At the recent AGM, Elon Musk expressed his view that humanoid robots will eventually outnumber humans by 2:1 or more.

 

[john tanglewoo]

Humanoid robots are still but a concept to everyone. Sure we've seen videos. But nothing yet that shows how they can integrate seamlessly into our lives. I hope that Tesla will start making that a priority - getting us "comfortable" with how we can live with a robot, and what we can expect. Too many unanswered questions at this point, but a lot of emphasis being pinned on the unknown. I (my shares) hope they impress.

 

[thenewguy1979]

NVDA at $200 would essentially a $5T company . I though $3T was not possible and look where we are.

3T, 5T, are chump changes per Elon TSLA can be worth $30T............more then the whole Tech Market Combined.

Even more then AAPL + ARAMCO then previously stated.

https://www.barrons.com/articles/elon-musk-tesla-30-trillion-050de498

 

[EnzoXYZ]

Humanoid robots are still but a concept to everyone. Sure we've seen videos. But nothing yet that shows how they can integrate seamlessly into our lives. I hope that Tesla will start making that a priority - getting us "comfortable" with how we can live with a robot, and what we can expect. Too many unanswered questions at this point, but a lot of emphasis being pinned on the unknown. I (my shares) hope they impress.

I hope Tesla starts with the robots added into the manufacturing process of all type of business. I see this is where the big bucks will come from. Personal robots won't be a thing unless you are the rich. Once that's been hammered out then I can see it in our personal lives. Robots in controlled environment will be extremely profitable for any business. Hopefully that's the first TAM Tesla targets.

 

[OrthoSurg]

NVDA at $200 would essentially a $5T company . I though $3T was not possible and look where we are.

NVDA did exactly what we all thought TSLA would do.

 

[thenewguy1979]

NVDA did exactly what we all thought TSLA would do.

and without the hype, fluff, and drama.......

 

[thenewguy1979]

AAPL did a retracement somewhat.

NVDA was waiting for retracement before buying long dated Call 2-3 months out. But seeing the pump and potential rebalancing of index not sure if it will retrace before hitting 150.

TSLA waiting for the bottom...........

SMCI - IDK. It can continue to pump along with NVDA like Dell.

 

[Patrick66]

What could go wrong!?

To each their own, but I'd say planning out to 2026 with NVDA is a dangerous game. A lot of things are going to happen in the next 12 months to the point where looking out 30 months would scare me.

 

[dl003]

Hmm the greed in me is wanting to do another strategy, essentially rolling out my
Short Expiry December 2025
50 x 83 puts

To $85 December 2026. Which will raise some cash + $7k of my own cash to buy back 20 contracts of the 150 strike. Leaving 5 contracts naked.

I can choose to do something with the 5 contracts if the stock pulls back. If we do remain above 130 or 140 by end of year i'll lose 3000 shares at that price range. So I can probably roll some of those December 2026 contracts forward with a much higher strike price to speed up the theta decay.

Just what I've been playing with in my head. It's a greedier play but 2025, 2026 whats the difference? Lol.... What could go wrong!?

As someone who has chronically engaged in naked selling of both puts and calls, my experience is given enough time, Murphy's law will be the rule of the game.

I'm not trying to scare you, as apparently I'm still routinely doing it. However, at a certain stage, consolidation is my go-to strategy while waiting for the smoke to clear. I think you're at that stage.

In my opinion, the biggest risk you're facing is neither a $5T or a $1T market cap, but a muddy outlook that is veering on the limit of what your positioning can handle. As such, I believe the remedy for that muddy outlook is not to increase risks, either through selling more puts or toughing it out with the calls, but to reduce risks, through consolidation. It buys you time for the stock to return to a more measured trajectory that can help you make better decisions.

 

[mrmage]

Looking for some not financial advice / input.

I think I have the situation properly sorted but It would be nice to get some input from people who are more experienced.

I sold some NVDA calls at the start of the year for FAR OTM strikes. They expire in December. Since then as the stocks been going up (170% to be exact) I've been rolling them up and selling puts to offset the premium costs. This works until it doesn't, as we've all experienced with TSLA. If this stock falls things could quickly go south so I'm hesitant in continuing the strategy. Here is how my portfolio looks with regards to NVDA positions

Long
6500 Shares

Short Expiry December 2024
10 x 130 Calls
20 x 140 Calls
60 x 150 calls
20 x 85 puts

Short Expiry December 2025
50 x 83 puts

As you can see there are naked calls here. All puts are safe and I can fund them with cash.

The way I see it is as NVDA rises towards 200 (Which it shouldn't break by end of year or even get to) I'll be short 2500 shares at $150. So my losses will start racking up from there. If I want access to more profits I could roll my 150's up and sell more puts but my hesitancy in doing that is the put premium at "safe" strikes is starting to get thin which means I would have to sell more contracts and my hesitancy in doing that stems from our lessons we learned from TSLA. Fool me once shame on you, fool me twice shame on me. So personally I'm thinking I stick with my current position or perhaps roll a small portion of the 150 calls to 160 and sell another 20 or so puts at a "safe" strike.

Advice or comments would be appreciated.

No spreads please lol.

I love spreads, not sure why that's bad? But here's my perspective on why shorting NVDA is so dangerous.

In the graph covering the last 5 years, the forward PE for NVDA has ranged from 25 to 70. However, if we omit the periods in red because those don't apply today, the range is 50 to 70, and NVDA is at the bottom end of that range today around 52 FPE.

Plus, the market has finally come to grips that NVDA deserves a bull valuation (50 to 70 FPE) and appears to be reverting back to the historical values for the company that reflect today's circumstances. NVDA's outlook has never been better, so even this may be conservative.

Furthermore, NVDA is selling Blackwell in the 2nd half of this year, and reports are that orders are massive. Conservatively, NVDA earnings should be up 10% this quarter and at least 10% next quarter. This would give share price around 180 assuming FPE 60 towards end of year.

But if guidance for next quarter is a hit because of Blackwell sales (e.g. 20%), and FPE jumps to 70, SP could in the 200s this year. No amount of rolling can catch up to growth like that. Shorting is a tremendous liability. You're playing with fire... in a dynamite factory.

 

[Jim Holder]

Watch @ 1.75x speed:

 

[thenewguy1979]

Micron is another AI player with earning coming up on the 26th. Provide HBM to NVDA AI cards.

Anyone positioning for this stock?

 

[⚡️ELECTROMAN⚡️]

Micron is another AI player with earning coming up on the 26th. Provide HBM to NVDA AI cards.

Anyone positioning for this stock?

What's the ticker?