Wiki Selling TSLA Options - Be the House

[AquaY]

I'm a new investor, in at 785 and have seen a 26% increase. I'll take it. Now trying to figure out at what price I'll buy some more. I'm thinking high 800's

You could start selling puts to buy the stock where you want to buy it

 

[ABC2D]

well, there is that

 

[HellsKitchen]

You could start selling puts to buy the stock where you want to buy it

I'm at investing 101 level; I'll research that.

 

[JusRelax]

Ok. Someone talk me out of this. Looking at selling Jan 2024 CC against my shares for 1500 strike. Let's assume 100 contracts. Get $1,080,000 now for BPS. Start selling 200 $50 Iron Condors/week. Assume conservative $1.75/condor = $35k/week to start. In one year, easily get to $3.5M as I will sell more spreads as the money grows. I expect the SP to hit 1500 in the next year (maybe sooner). I would buy them back at that point - So I will have to close the CC at a loss. Current 920 strikes (for Jan 2024) are $250, so I assume if the stock gets to 1500, they will cost something in that range, for a tax deductible loss of $1.5M to close them ($2.5M - the $1M I get now), leaving me at least $2M in net income. Seems like a nice "loan." What am I missing?

I somehow think you don't need to be talked out of this anymore.

 

[Bunky]

Call rolling it is then, in perpetuity.

 

[InTheShadows]

Well took a bath closing my -1000/1050 calls this morning near open. Kept 2 contracts of the long 1050’s. Should have done that with all of them. Those are now worth 2x what I closed the 1000’s for.

My GTC orders fired this am on my short 850 puts, reopened them at -890. Using no margin and in Ira & Roth accounts leaving 15% cash in case there is a pull back and I need to manage.

I didn't enter GTC orders for the new positions yet need the cash to settle in some of the accounts.

Also didn’t sell the shares to buy the leaps. *sigh*

 

[pz1975]

I can't believe I am genuinely getting nervous about the 1200 CCs I sold this morning.

 

[Nocturnal]

I guess I sold those CCs too early. Wow.

 

[corduroy]

It's still only Monday. In the past, my biggest losses have been from jumping the gun and reacting to big moves, so this time I am going to wait a few days and see what happens. Waiting is not easy though!

 

[Ogre]

I can't believe I am genuinely getting nervous about the 1200 CCs I sold this morning.

I sold some CC this AM as well at 1030 when the share price was $980… 10 minutes later watching the ticket bouncing all over the place bought them back for a loss… going to hold off on any more trading until things settle one way or the other. Made enough on the underlying that the $500 goof with CC didn’t matter.

 

[adiggs]

Call rolling it is then, in perpetuity.

I figure that any roll that adds 1 or 2 weeks to the option, generates even a small net credit, and improves the strike price is a roll worth doing. The challenge with the perpetual call roll - can you stay in contact with the share price as it goes up? If you do then eventually it'll slow down and even turn around. That's when, as long as the strike keeps improving each week, you'll eventually be able to close the position.

The problem I got into with my cash secured puts previously is that they got so deep ITM that I could no longer roll for a strike improvement.

 

[Ogre]

You could start selling puts to buy the stock where you want to buy it

I tried that… pocketed a couple grand and watch the share price explode.

 

[pz1975]

I figure that any roll that adds 1 or 2 weeks to the option, generates even a small net credit, and improves the strike price is a roll worth doing. The challenge with the perpetual call roll - can you stay in contact with the share price as it goes up? If you do then eventually it'll slow down and even turn around. That's when, as long as the strike keeps improving each week, you'll eventually be able to close the position.

The problem I got into with my cash secured puts previously is that they got so deep ITM that I could no longer roll for a strike improvement.

I like having shares for this reason. I rolled some old CCs I'd been babying all the way out to March 2022 this morning for a 1,150 strike price for $0 credit. I am basically just going to ignore them as they don't lower my margin available (maybe increases it?) and if I have to sell some LEAPS above $1,150 in March to close them out the whole thing will still be insanely profitable.

 

[mongo]

I tried that… pocketed a couple grand and watch the share price explode.

Word

 

[samppa]

I had sold a few contracts of -1100/+1300 bcs this morning, rather as an experiment.. bought them back for a few $k loss.

Note to self: do not sell calls.

 

[InTheShadows]

I sold some CC this AM as well at 1030 when the share price was $980… 10 minutes later watching the ticket bouncing all over the place bought them back for a loss… going to hold off on any more trading until things settle one way or the other. Made enough on the underlying that the $500 goof with CC didn’t matter.

Where did you find 1030 calls? Next week?

I can’t believe the MM’s didn’t fill in the call gaps for this week yet.

 

[dc_h]

Interesting paradox. I stand to lose on 30 1000-1050 call spreads, but have a similar amount of leaps and shares. Technically, I'll break even. If I roll to 11/5, it will cost me 12k cash, but I benefit from continued rise. The rise this morning seems like a technical response to a fundamental change in the demand risk for Tesla (discounted future cash flow just changed) and after a significant jump, that put pressure on MM's to buy shares to cover open calls. (anybody jump in to correct me). If we've stopped here, is this our top for the week and we see a fall back to 950 to 1000? Do we have a gap to fill? A few weeks back when we had the big fall to ~700, I had BPS that came near the money and was able to sit on my hands. We bounced back the rest of the week and I had great results for the week. I think that was @Lycanthrope 441 fat finger week. Anyhow, I'm pondering my next move and need to keep in mind that with the run up, it's not a bad place to be. I also feel like my ratio of stock/leaps to trading money is about right. In a worst case scenario, I lose margin about equal to my stock\leap gains.
Anyhow, I'm hoping MM's can get their act together and hold us under 1000. Perhaps poor sport for the HODL'ers, but I think that is the consensus in this thread for today. I'd also share some of @Lycanthrope and others concern about a rebound down to take out some BPS positions. These big moves often create an IV storm that knocks out traders that are too close and can hurt you on the upside and again on the downswing. When there's tons of money to be made, there may be more risk than is apparent.
I closed out bps this morning on 80% gains from last week. I opened up new BPS and closed again for 50% profit. Still standing to lose much more with the dumb call spreads.

I'm feeling less sanguine about sitting on my 1000-1050 calls, but it is only Monday. If we go past 1050, I'll make up for the loss. I also have a longstanding 1025-1125 bull spread. If it works, I make 100 on a 10k investment. It's due June 22, but the 1125 leg is rising almost as much as the 1025. Anyhow, will be interesting to see if we just blast straight up to 1200, or find a new base here somewhere. Having a big 150 point gap up seems like an invite for a battle between 900 and 1100 or 1200 the next 2-3 months.

 

[MikeC]

Where did you find 1030 calls? Next week?

I can’t believe the MM’s didn’t fill in the call gaps for this week yet.

Agree, the lack of available strikes is complicating my ability to roll my 11/5 -c1025

 

[ABC2D]

with this move, Sep 16, 2022 1050C @ 172.00 seems pretty good priced - asking for opinion

 

[BornToFly]

Definitely squeeze. Closed most of my 1000/1050 at massive loss to prevent a loss that puts me negative for the month. Live to fight another day. I should have closed much sooner.