Wiki Selling TSLA Options - Be the House

[Yoona]

i feel like i need to read this thread again all the way from 10 days ago, there are some gems that have to sink in until i get it

 

[scubastevo80]

Try closing out wings of the IC separately next time. Often that will go faster than getting the brokerage to close out the full IC at one time.

I tried - the brokerage only lets me address as one entire trade. I opened up the wings separately for this week so I can do just that.

 

[FS_FRA]

Opened 11/5 BPS -900/+600 @ $3.58

Not planning to sell any calls, cc's etc. until this meme-stock action is over and the stock price stabilizes. The 1300c I sold last week ended up safe as expected, but premiums are too low to be attractive $200 away from the current price. And I don't really feel safe there. @pz1975 is right with >50% away, but premiums there suck.

 

[InTheShadows]

At ATH, shouldn't strategy be more of selling BCS rather that selling BPS?
At some point SP will drop. Clearing 1100, 1200 etc will need multiple attempts. cheers!!

Maybe for a normal company but this is Tesla. There are two more factories about to come on line and each of them have the capacity of the entire company currently. Tesla is no longer an infant. So the risk is mostly gone. She is now a toddler that just learned to walk and before you know it, that toddler will be running and jumping over all obstacles.

 

[Cherry Wine]

Interesting that IV is starting to fall on higher short-dated call strikes even as we move higher.

 

[EVCollies]

For 11/5 BPS 885/685 @ 3.9
Order placed for 11/5 CC 1250 @ 5.0, SP dropped immediately after my order so not filled yet but still open. I have not lowered my offer, will let fate decide...

 

[BrownOuttaSpec]

I still feel like I am hurt but this week's positive jump and feel like we could still see wild swings next week. decided to be a little father out and do the following. Probably left a lot of money avaialble but +$1.34x and less stress is okay for me for next week. Still learning and reading.
BPS 745/845 11/5 @ 1.34

 

[jeewee3000]

I don't know, folks, I think if I add up all the money I've ever made from selling covered calls, which was like a buck at a time while the stock price was pretty level and IV pretty low, it might add up to less than I lost Monday when they ran away from me. And you all have some way more painful stories. I'm ready to swear them off forever.

In theory I guess there should be an even-ish balance between puts and calls around a slow-moving stock price. It's just that I see way more chances for Tesla to gap up than to gap down in the next couple years in general.

There might still be an immediate pullback after this crazy rally, sure. And we may see some red flags that indicate trouble coming -- slow ramps at the new factories, poor production numbers from China, Elon sounding increasingly nervous or frantic about deliveries toward the end of a quarter... but absent some trigger, calls just have me way more nervous.

Is someone willing to make a case for why they're truly valuable / really not that bad?

Oh, yeah, just got my alert that we hit $1100 again.

So tell me again, calls?

This is why I never sell cc's against all my shares. Only about 30 to 60 percent depending on my confidence levels. That way I have more outs in case it goes wrong.

 

[Discoducky]

I rolled my $820s out to Nov 26th for a small profit, but thinking I'll end up rolling again out until Jan and then let them go.

I'm going to let my $850s go now as it feels good to sell these as I've been holding onto these for a long time and it is a great celebration of it hitting $1100; so no worries.

I rolled my $1000s to Nov 19th up to $1090 for a small profit, but might end up letting these go as well after Jan.

I'm so glad that I didn't mess with my retirement accounts and put some into LEAPs. WOW, these are up! It has been a 7 figure week for those! So happy Friday!

 

[Knightshade]

Closed out my $1400 calls sold yesterday for 50% profit just so as not to worry about em.

Got tired of waiting for dip that was apparently never coming today so sold BPSes +840/-940 (seems a decent put wall at 950 next week to hide behind, would've done 845/945 if they'd existed) for $3.50 net credit.

 

[CLK350]

BTW just because a YOLO friend of mine asked and I could cut and paste the math here- for anyone thinking there'll be another gamma event Monday-

$1300 calls for next Friday wouldn't get profitable at all Monday until it spiked over $1144... $1184 is 50% profit, and about $1172 is double your money.

The $1200 calls are (barely- 1%) profitable Monday at 1125, $1145 is about 50%, and $1159 is double your money.

But theta eats this FAST... For the 1200s $1140 on Monday is 38.2% profit, it's 2% on Tuesday....for the 1300s $144 is just above even Monday but -47% by Tuesday at same SP.

Hmm .. well I *did* play the lottery yesterday, baby YOLO - figuring the (short term) trend (!) is UP considering how the MM's seem unable to do their usual Mandatory Morning Dip and 11 am pushdowns, struggling with the 3 PM and close most of the recent past. What's to prevent the same folks doing that gamma squeeze last Monday repeating the maneuver again - the conditions seem good, TSLA expected to pop Monday again.

That 1150 Nov 5 Call only need peak on Monday when I intend to sell it. Where's the possible glitch - no liquidity to sell near the (expected) high ? Or bad macro news, or some such tanking TSLA Monday?

 

[buttershrimp]

Try closing out wings of the IC separately next time. Often that will go faster than getting the brokerage to close out the full IC at one time.

Be very very careful doing this, I got burned badly closing the IC on front week and then opening a new position. Try to open the new position first before shutting the old one down. Have enough in reserve to do that and it shouldn’t be a problem. I also plan to start earlier next week.

 

[Knightshade]

That 1150 Nov 5 Call only need peak on Monday when I intend to sell it. Where's the possible glitch - no liquidity to sell near the (expected) high ? Or bad macro news, or some such tanking TSLA Monday?

Well, depends how big a spike... At about $1154 you double your money. At about $1115 you lose ~50 bucks. If SP is flat from right now you lose about $500.

By no means a terrible gamble, but it IS a gamble.... (otherwise you'd have bought a lot more than 1, right?)

 

[adiggs]

I just sold some puts in my brokerage / margin account. Turns out that these need $23k margin each instead of the $90k that cash secured puts would need. Zowie!! I know that y'all doing margin backed put spreads already know this - it's new to me and .. uhm ... potentially dangerous; at least for me. I haven't previously made any use of margin and in retrospect I've been holding myself back in a big way. I've been managing that account to keep the margin balances positive, while also carrying a lot of cash that (it turns out) the brokerage hasn't cared about.

So in this particular case I'll do short puts backed by margin rather than $200 wide spreads. It doesn't change what I do in the retirement accounts where cash secured is all that's available, but it looks like I'll crank up the puts / put spreads in the brokerage by a little bit (hopefully not famous last works ).


While I was at it I've opened up my put spreads for next week. I decided on 700/900s for a 3.20ish credit. I chose the 900 strike as it's the previous ATH and I figure that'll provide some support if we head back down. Heading back down sure seems like the last thing to be worrying about but until some supports and resistance show up and acquire some substance I'll use the high IV to head further OTM instead of increasing income.

I also opened a few 950 short puts @ 7. Here I added enough short puts to the put spreads so that I have a total commitment that exceeds the marginable value in the account, while still having nearly enough cash to cover the positions. This is comfortably the most margin I've ever used before. The incremental position is one of those small test drive positions to see how things evolve.

The 950s are a small % of overall position for earning extra. This is still only the .10 delta, so my overall put positions is really OTM.

 

[UltradoomY]

I just sold some puts in my brokerage / margin account. Turns out that these need $23k margin each instead of the $90k that cash secured puts would need. Zowie!! I know that y'all doing margin backed put spreads already know this - it's new to me and .. uhm ... potentially dangerous; at least for me. I haven't previously made any use of margin and in retrospect I've been holding myself back in a big way. I've been managing that account to keep the margin balances positive, while also carrying a lot of cash that (it turns out) the brokerage hasn't cared about.

So in this particular case I'll do short puts backed by margin rather than $200 wide spreads. It doesn't change what I do in the retirement accounts where cash secured is all that's available, but it looks like I'll crank up the puts / put spreads in the brokerage by a little bit (hopefully not famous last works ).


While I was at it I've opened up my put spreads for next week. I decided on 700/900s for a 3.20ish credit. I chose the 900 strike as it's the previous ATH and I figure that'll provide some support if we head back down. Heading back down sure seems like the last thing to be worrying about but until some supports and resistance show up and acquire some substance I'll use the high IV to head further OTM instead of increasing income.

I also opened a few 950 short puts @ 7. Here I added enough short puts to the put spreads so that I have a total commitment that exceeds the marginable value in the account, while still having nearly enough cash to cover the positions. This is comfortably the most margin I've ever used before. The incremental position is one of those small test drive positions to see how things evolve.

The 950s are a small % of overall position for earning extra. This is still only the .10 delta, so my overall put positions is really OTM.

Back to drinking the straight Put koolaide!
Love it! I'm on the same ride!!!

 

[juanmedina]

I bought back my 10x $1090CC I made like $300

I end up buying one $1100 call for next week.

 

[ammulder]

While I was at it I've opened up my put spreads for next week. I decided on 700/900s for a 3.20ish credit. I chose the 900 strike as it's the previous ATH and I figure that'll provide some support if we head back down. Heading back down sure seems like the last thing to be worrying about but until some supports and resistance show up and acquire some substance I'll use the high IV to head further OTM instead of increasing income.

It is almost comical that only $200 OTM feels safe. If we were at $650 — flash back like a month or two — and you said you’d only sell a $250-450 spread, you might have been laughed out of the thread! OK, not really, y’all are nicer than that, but my how times change. Truly, I can’t argue with your present logic!

In any case, I agree that it’ll be nice to have a few flat days to catch our breath. We did lose like $8 once this week, right? But only after an intraday waffle of like $70? Its just crazy this week.

I think I do buy the theory that fund managers who were underweight TSLA are capitulating. I read that the initial S&P weight was 1.8% but this week it’s up to 2.8% (and I guess more as of today). So any benchmarked fund without TSLA is just throwing a decent amount of their gains out the window, and with steadily increasing profits and huge order backlogs and new factories on the verge of opening, Tesla starting to look like the textbook definition of success, so it seems an odd one to skip.

Anyway, I looked at my spreadsheets and I owe calls an apology, as they did well by me for a good while… right up until they didn’t. Mathematically, I should probably keep right on including them as a hedge against a pullback. It just feels way riskier when put spreads have been so much more reliable. I think as long as I can meet my goals with put spreads, I may just stick with them and use prior profits as my hedge. But we’ll see if we settle a bit and calls stop making me so nervous.

 

[elasalle]

Maybe for a normal company but this is Tesla. There are two more factories about to come on line and each of them have the capacity of the entire company currently. Tesla is no longer an infant. So the risk is mostly gone. She is now a toddler that just learned to walk and before you know it, that toddler will be running and jumping over all obstacles.

Yes for long term.
Short term ... who knows !!

 

[samppa]

TSLA is up 200 dollars since last fridays closing. That is ONE THOUSAND DOLLARS pre-split.

I've been really cautios this week, and will continue to be cautios. Closed all my BPS for 11/5 just now, they were around 40-50% profit. These were opened tues/wed this week.

I'll look for new entry points on monday. Not selling any calla or BCS for now.

 

[BornToFly]

I just sold some puts in my brokerage / margin account. Turns out that these need $23k margin each instead of the $90k that cash secured puts would need. Zowie!! I know that y'all doing margin backed put spreads already know this - it's new to me and .. uhm ... potentially dangerous; at least for me. I haven't previously made any use of margin and in retrospect I've been holding myself back in a big way. I've been managing that account to keep the margin balances positive, while also carrying a lot of cash that (it turns out) the brokerage hasn't cared about.

So in this particular case I'll do short puts backed by margin rather than $200 wide spreads. It doesn't change what I do in the retirement accounts where cash secured is all that's available, but it looks like I'll crank up the puts / put spreads in the brokerage by a little bit (hopefully not famous last works ).


While I was at it I've opened up my put spreads for next week. I decided on 700/900s for a 3.20ish credit. I chose the 900 strike as it's the previous ATH and I figure that'll provide some support if we head back down. Heading back down sure seems like the last thing to be worrying about but until some supports and resistance show up and acquire some substance I'll use the high IV to head further OTM instead of increasing income.

I also opened a few 950 short puts @ 7. Here I added enough short puts to the put spreads so that I have a total commitment that exceeds the marginable value in the account, while still having nearly enough cash to cover the positions. This is comfortably the most margin I've ever used before. The incremental position is one of those small test drive positions to see how things evolve.

The 950s are a small % of overall position for earning extra. This is still only the .10 delta, so my overall put positions is really OTM.

Correct, but be advised that as the SP drops they will raise that $23k margin requirement on you (sometimes a lot), at the same time that your avaiable margin is dropping. That is why I like the idea of the spreads. Less likely to get a margin call since the margin required doesn't suddenly double on you.