Wiki Selling TSLA Options - Be the House

[M3Rider]

There's many good reasons to do so.

1.) You overshot your strike, already ITM and you want to pick a new target that takes you OTM, exchanging more time for net credit.
2.) You want to reduce your margin/debt load/risk requirements. 100 points per contract over many contracts is substantial.
3.) Catalyst event appears jacking up volatility. You can make the same premium for lower strikes selling into the event.
4.) Catalyst event appears that pushes you ITM, going OTM will slow your rate of loss. (happened to my friend during this Twitter "Poll")
5.) Combination strategies with short strangles. Not knowing how an event will play out, roll down premium loss is compensated with premium gain from short calls.

If rolling ATM was always beneficial, why don't we go the other way and just sell ITM. The arguments apply just the same. There is a strategy around this called a Guts Strangle.

ATM is generally preferred, but situations like the five examples above makes rolling down the better play.

In general yes, but this was 890 to 870 roll I.e. from DOTM to DOTMer.

With everyone (mostly Gary Black) screaming that as soon as sale is done or much earlier the SP will shoot up. I figured next week or the one after that. This one was a bit unexpected, not sure what to make of it. Elon goes 1m/day, so 8 more days left to go.

Kinda seems like the market is starting to disregard his sales already, which is a bit premature because I’m not ready for the move

 

[MP3Mike]

Kinda seems like the market is starting to disregard his sales already, which is a bit premature because I’m not ready for the move

Maybe because it was never actually Elon's sales that caused any of the stock price drop...

 

[MXWing]

Maybe because it was never actually Elon's sales that caused any of the stock price drop...

Absolutely. He's not selling 10% of Tesla's entire float.

10% of 10% of Tesla's float which is what Elon is moving is practically nothing.

never "actually Elon's sales."

 

[M3Rider]

Maybe because it was never actually Elon's sales that caused any of the stock price drop...

Pretty sure it was a HF’s play on his tweet, which scared everybody into submission.

Not his daily sales, but same subject.

 

[MP3Mike]

Was it yesterday or today in the main thread where someone said it wasn’t very nice of Elon to tank the stock with this series of tweets and they had a friend who needed to sell some shares to buy a house and was going to have to sell 15-20% more shares because of this… and was greeted with what?

1. Real investors don’t sell, therefore you and your friend aren’t real investors
2. only an idiot would put themself in a position where they need to sell
3. only an idiot wouldn’t have identified and sold at the top if they needed to sell
4. only a jerk would whine about this when the stock price is still up from May
5. if you don’t like what Elon tweets you are no good and should sell all your TSLA stock
6. …

There was a notable lack of “bummer!” or any other sympathy.

I suspect that part of the reason for the lack of "bummer" posts is that was obvious that they didn't plan to buy the house, pick it out, arrange the loan, etc. when the stock price was at an ATH, which was only for what ~6 days? So they had already planned to sell more than the 15-20% "more" shares than they would have if they timed the sale for the ATH.

So yeah, it sucks that there timing was off a little, but they still probably ended up selling significantly fewer shares than they originally planned to sell.

 

[Boomer19]

Thank you @ammulder for your defense attorney efforts.

@winfield100 when I meant some, I didn't mean ALL. When I meant some, there was enough, and by some - there was too many with that kind of sentiment.

I don't even let my wife tell me what to do with my options, so boomers who don't have to work as hard as we do as active traders can GTFO. By boomers, I mean your mindset, not your age.

boomer?

 

[EV forever]

How do you manage the holy spreadsheets in situations like last week when all I did was roll out the positions to a later date? I was looking through the numbers for last week - and since all BPS were rolled out to later dates, it appears like last week was pretty bad with large losses. Do you wait till all the new positions are closed to calculate where you stand overall?

 

[Tslynk67]

How do you manage the holy spreadsheets in situations like last week when all I did was roll out the positions to a later date? I was looking through the numbers for last week - and since all BPS were rolled out to later dates, it appears like last week was pretty bad with large losses. Do you wait till all the new positions are closed to calculate where you stand overall?

A roll is simply a close of one position and an open of another, so although they are a combined order with your broker, in terms of accounting they can be seen as totally separate transactions. So yes, can be you closed the existing BPS at a loss, but carry potential profits into the next position, but you need to wait until that is closed before making any assumptions on gains or losses

 

[ammulder]

How do you manage the holy spreadsheets in situations like last week when all I did was roll out the positions to a later date? I was looking through the numbers for last week - and since all BPS were rolled out to later dates, it appears like last week was pretty bad with large losses. Do you wait till all the new positions are closed to calculate where you stand overall?

I think the only way to avoid the week showing a large loss is to track everything on a cash basis instead of paper gains/losses. But that has its own disadvantage, namely, that if the stock keeps going down and you keep rolling then everything can look fine on the sheet — while you have a bomb hanging over your head growing larger and larger but not reflected in your numbers.

According to E*Trade my annual gains did take a big hit when I rolled everything… so while my cash is OK it probably is more reflective of reality to book the large loss now, and hopefully a corresponding gain later when the stock price recovers sufficiently.

 

[jeewee3000]

Was it yesterday or today in the main thread where someone said it wasn’t very nice of Elon to tank the stock with this series of tweets and they had a friend who needed to sell some shares to buy a house and was going to have to sell 15-20% more shares because of this… and was greeted with what?

1. Real investors don’t sell, therefore you and your friend aren’t real investors
2. only an idiot would put themself in a position where they need to sell
3. only an idiot wouldn’t have identified and sold at the top if they needed to sell
4. only a jerk would whine about this when the stock price is still up from May
5. if you don’t like what Elon tweets you are no good and should sell all your TSLA stock
6. …

There was a notable lack of “bummer!” or any other sympathy.

If I went and said “man it sucks that my put spreads are ITM” I’m pretty confident that I’d get “you’re not a TSLA investor because you don’t HODL only” and “it’s been proven by X, Y, and Z that anybody who sells options loses all their money” and “you may think you’re doing well but it’s only a matter of time before you lose the rest” and “nobody listen to this guy and his terrible ideas but just HODL” and so on.

I don’t necessarily agree that they *wish* to see option traders lose, but there’s certainly no love for options trading, and seemingly not even acceptance really, outside of those who are on this thread also.

People fear what you they don't understand.

 

[InTheShadows]

Well the past week has been quite the learning experience. It’s interesting now after a few rolls how my initial positions have progressed as well as my thoughts.

Monday am I was looking at max loss for many. I am much more conservative with my wife’s retirement accounts than I am with mine. My Roth which was twice the size of hers was half the size of hers on Monday. It’s just a little behind hers now. I had 200 wide spreads in hers way OTM. Her Roth is the only account that I’m managing that has continued to make its weekly targets. This week just that account alone got me 45% of this weeks goal for all of our personal portfolios.

Many of my spreads had the mid point breached and on Monday about 1/3 of them had both legs breached. I felt totally hopeless with ideas on how to fix those.

The ones that have had the mid point breached I’ve rolled them out trying to get a strike improvement. The ones that were about halfway between midpoint and the short leg I was able to get decent strike improvements by rolling.

I’m planning on rolling these out a week at a time on strong days trying to get a small credit and max strike improvement. At this point right now I feel I will be able to exit without any losses, however a lot of lost opportunity seeing how my wife’s Roth has been bringing in really nice premiums with still being really conservative.

Sold an 1130 LCC in my Roth yesterday so I will see a winner in it this week. If I loose that leap, then everything else I will be able to exit for a gain. Even the bps I kicked down the road to next week.

 

[OrthoSurg]

Sold -1105/+1205 BCS for this friday for $5.
Premium was good and I believe price will be depressed for the rest of this week.

Are you going to roll or close that position and what is your trigger point? 100% loss?

 

[InTheShadows]

I think the only way to avoid the week showing a large loss is to track everything on a cash basis instead of paper gains/losses. But that has its own disadvantage, namely, that if the stock keeps going down and you keep rolling then everything can look fine on the sheet — while you have a bomb hanging over your head growing larger and larger but not reflected in your numbers.

According to E*Trade my annual gains did take a big hit when I rolled everything… so while my cash is OK it probably is more reflective of reality to book the large loss now, and hopefully a corresponding gain later when the stock price recovers sufficiently.

I keep mine tracked for each series when rolling. So if I roll, I don’t reset the open date, I keep the stock entry price as the original, and I add or subtract the previous premiums and fees to the current position. My spreadsheet also gets me the last option prices when I click a button so it updates the % PnL on the position so I know exactly where it is at.

I’m mot even sure I could effectively trade without it.

 

[OrthoSurg]

People fear what you they don't understand.

I always was curious of all the option glossary. It made me more and more curious every time I saw people talking options and I didn’t understand a word what was Strike price, ATM, OTM, BPS, calls, etc…

If you guys didn’t post in the investors thread I would probably never ended up here. And for real options make it more fun when TSLA drops and I was
following TSLA moves anyways so it doesn’t really add extra time to my day.

I guess some people fear what they don’t know and other what to understand it. We are probably all worse differently. But if you stay in the investors thread after 5 years and never learned about options, tou might develop bitterness towards those who have 10x their revenues compared to just holding

 

[AquaY]

How do you manage the holy spreadsheets in situations like last week when all I did was roll out the positions to a later date? I was looking through the numbers for last week - and since all BPS were rolled out to later dates, it appears like last week was pretty bad with large losses. Do you wait till all the new positions are closed to calculate where you stand overall?

it is a loss in the current week/month however you keep your spread sheet

 

[mongo]

mongo's ramble
Having cash, shares, and written puts in one's account makes for a lot of cognitive dissonance on any stock move (or lack thereof).

Main investor thread does have discussion of moving between shares and purchased leap calls. Those at least move in the same way; but then comes debate over if calls are investing vs trading.

Some of it is Tesla because Tesla. Whereas Tesla as ROI is less 'pure'. I like Tesla because, even if it tanks for a time, I'm happy to have/ be part of the company. Not so with the other EV stocks one could have doubled their money with this month.

I do appreciate a place where one can admit to reducing their risk/ stress level without comment on the composition of their appendages (even if the net outcome is less account value).

 

[AquaY]

Was it yesterday or today in the main thread where someone said it wasn’t very nice of Elon to tank the stock with this series of tweets and they had a friend who needed to sell some shares to buy a house and was going to have to sell 15-20% more shares because of this… and was greeted with what?

1. Real investors don’t sell, therefore you and your friend aren’t real investors
2. only an idiot would put themself in a position where they need to sell
3. only an idiot wouldn’t have identified and sold at the top if they needed to sell
4. only a jerk would whine about this when the stock price is still up from May
5. if you don’t like what Elon tweets you are no good and should sell all your TSLA stock
6. …

There was a notable lack of “bummer!” or any other sympathy.

If I went and said “man it sucks that my put spreads are ITM” I’m pretty confident that I’d get “you’re not a TSLA investor because you don’t HODL only” and “it’s been proven by X, Y, and Z that anybody who sells options loses all their money” and “you may think you’re doing well but it’s only a matter of time before you lose the rest” and “nobody listen to this guy and his terrible ideas but just HODL” and so on.

I don’t necessarily agree that they *wish* to see option traders lose, but there’s certainly no love for options trading, and seemingly not even acceptance really, outside of those who are on this thread also.

Yeah that sounds like the main thread alright

 

[winfield100]

this may affect your options buying as here are the, to date,S4 forms summarized.
~27% of options exercised ~45% of the 17 million shares dispersed of the 10% he said would sell with avg $ of sales

price

shares

pre split

$31.17​

8/13/2012​

pre split

5,274,901​

90% of total

post split

$6.234​

post split

26,374,505​

23,737,050

shares

Stock

11/8/2021

M

2,154,572

A

$6.234

2,154,572

$13,431,601.85​

acquired

9.1%​

11/15/2021

M

2,107,672

A

$6.23

2,107,672

$13,139,227.25​

acquired

8.9%​

11/16/2021

2,113,761

A

$6.24

2,113,761

$13,189,868.64​

acquired

8.9%​

26.9%​

6,376,005

total

acquired

$39,760,697.74

Avg $

11/8/2021

934,091​

D

$1,101,093,923.72​

dispersed

$1,178.79​

11/9/2021

3,088,047​

D

$3,353,496,896.10​

dispersed

$1,085.96​

11/10/2021

500,000​

D

$527,271,411.03​

dispersed

$1,054.54​

11/11/2021

639,737​

D

$687,297,093.55​

dispersed

$1,074.34​

11/12/2021

1,200,000​

D

$1,235,607,328.52​

dispersed

$1,029.67​

11/15/2021

934,091​

D

$930,718,759.75​

dispersed

$996.39​

11/16/2021

934,091​

$973,353,173.16​

dispersed

$1,042.03​

total so far

8,230,057​

D

shares

$8,808,838,585.84​

$1,070.33​

 

[elasalle]

Adding BPS 900 and below for next week

Talking options on main thread adds - Fear, Uncertainty and Doubt - I do it anyway

In this thread for weeklies and in main for the rest. Cheers!!

 

[juanmedina]

You are correct.

But I still like my RIVN DEC 200 puts even though I am losing a bit now.

90 percent of my trading is TSLA.

What is your target profit on those puts?