Wiki Selling TSLA Options - Be the House

[FS_FRA]

Seems like he‘s done, according to this from Reuters:

Link: Tesla's Musk says he sold 'enough stock'; slams California for 'overtaxation'

Edit: @EV forever got there first.

 

[generalenthu]

Hmm, is this normal or abnormally high IV? I get that it would tie up a lot of cash, but wow!

View attachment 746778

That's just a calculation artifact from wide bid ask spreads. The dollar value of high IV - normal IV in options is small when far away from the money.

 

[mongo]

Looks like he is finally done selling! For real this time

View attachment 746924

Seems like he‘s done, according to this from Reuters:

View attachment 746933

Link: Tesla's Musk says he sold 'enough stock'; slams California for 'overtaxation'

Edit: @EV forever got there first.

Don't be too sure based on Reuter's regurgitation, that's from the Bee interview which was recorded before yesterday's sale of stock.
It could be that he knew it would be released post 21st sale. Or it could be it was not a definitive statement as to the state of the 10b5-1 plan (versus his discretionary sales).

"I sold enough stock to get to around 10%, plus the option exercise stuff and I tried to be extremely literal here."
He calls out sales and options distinctly. Technically, he exercised his options (with resulting tax implications) as opposed to selling shares from his holdings (via the Trust which he did earlier).


There are still unexercised options that expire next August (and one tranche he may yet qualify for).

 

[FS_FRA]

So.... I'm not in the market this week for various reasons. One of which is my desire to see Elon finishing his selling, which I expected before XMAS. I am looking at 12/31 though, to nibble back some of my fat-finger loss from last week.

I've not traded options over XMAS period before (other than some calls I purchased last year on the S&P inclusion run). Is there a general consensus to be in the market next week, or rather wait for Jan'22?

Aside from the above, I am considering doing one Mar'22 -1000/+1100 BPS @ $70ish (or whatever the number is today), just to see how long expiration BPS work. Max risk seems manageable - and I do consider TSLA above 1100 by then a near certainty.

 

[TheTalkingMule]

Aside from the above, I am considering doing one Mar'22 -1000/+1100 BPS @ $70ish (or whatever the number is today), just to see how long expiration BPS work. Max risk seems manageable - and I do consider TSLA above 1100 by then a near certainty.

View attachment 746959

I feel like every big dip eventually finds an options trade that is so close to free money that the SP must rebound. Things had gotten too absurd.

IMO this is that trade for our current dip. I'm in for one at the open just to see how it goes. (and collect free money if there's no catch )

 

[UltradoomY]

So.... I'm not in the market this week for various reasons. One of which is my desire to see Elon finishing his selling, which I expected before XMAS. I am looking at 12/31 though, to nibble back some of my fat-finger loss from last week.

I've not traded options over XMAS period before (other than some calls I purchased last year on the S&P inclusion run). Is there a general consensus to be in the market next week, or rather wait for Jan'22?

Aside from the above, I am considering doing one Mar'22 -1000/+1100 BPS @ $70ish (or whatever the number is today), just to see how long expiration BPS work. Max risk seems manageable - and I do consider TSLA above 1100 by then a near certainty.

View attachment 746959

*Not Advice* is Meh....
$73 for roughly 10 weeks isn't great IMO and you have so much time value, that it's harder to manage until closer to expiration.

You could do weeklies for $7-10 each and come out farther ahead or the same and have many more management options - in addition to IV spikes increasing return.
If this was me - and I had to place this trade - it would be straight Puts instead of a spread so I had more management options and also a better credit up front.

 

[st_lopes]

Clipped 1170cc and lccs at 80% gains this morning. Also clipped 1150/1200 at 80% gains this morning.

Not bad for 2 days of price action. Now we wait to re-enter CC/LCC/BCS for next week. Will sell the new batch on strength or will take whatever premium is available (at strikes 1150-1200) as of Wednesday PM.

Remaining position for this week 830/780 BPS.

I'm of the view we're at or nearing the bottom. RSI is flashing heavily oversold. Omicron fears are getting overblown, but it will take a few news cycles to pivot to what matters (hospitalization and death rates). VIX is coming down from the danger zone as well. QQQs are hovering at 20MA on weekly chart, would need a definitive break below 380 (on weekly chart) to signal the bull market coming to an end.

Yesterday's price action gave me a few opportunities:

• STO 1130 12/31 cc and lcc @ $1;
• BTC 830/780 12/17 @ 70% gains;
• STO 1150/1200 800/750 12/31 IC @ $4;
• Rolled up the 800/750 12/31 BPS (at 50% intraday gain) to 830/780 for $1.8 extra credit;

I'm comfortable playing closer to the money on BPS side and when I opened the CC/LCC/BCS they were all 20% OTM. We'll see if we get another monster rally in to next week that jeopardizes the call side of the equation, though plenty of buying power available to manage those if needed. Plus, I'm finally delta positive again after ripping off the bandaid on all those DITM CCs, so I can enjoy the ride up this time!

 

[TheTalkingMule]

*Not Advice* is Meh....
$73 for roughly 10 weeks isn't great IMO and you have so much time value, that it's harder to manage until closer to expiration.

You could do weeklies for $7-10 each and come out farther ahead or the same and have many more management options - in addition to IV spikes increasing return.
If this was me - and I had to place this trade - it would be straight Puts instead of a spread so I had more management options and also a better credit up front.

There's value in not having to watch the ticker, care, or manage for 3 months.

Straight puts vs BPS is considerably more risk.

So far less risk, heartburn and work.....for the same return. That's the whole point.

 

[generalenthu]

There's value in not having to watch the ticker

You gotta be kidding.

 

[FS_FRA]

*Not Advice* is Meh....
$73 for roughly 10 weeks isn't great IMO and you have so much time value, that it's harder to manage until closer to expiration.

You could do weeklies for $7-10 each and come out farther ahead or the same and have many more management options - in addition to IV spikes increasing return.
If this was me - and I had to place this trade - it would be straight Puts instead of a spread so I had more management options and also a better credit up front.

To me it's more a chance of practicing a long-term BPS. I'm in for 1x only, my margin is not really affected, and I continue to do weeklies as per the last 6 months for "real" earnings.

 

[Tslynk67]

So.... I'm not in the market this week for various reasons. One of which is my desire to see Elon finishing his selling, which I expected before XMAS. I am looking at 12/31 though, to nibble back some of my fat-finger loss from last week.

I've not traded options over XMAS period before (other than some calls I purchased last year on the S&P inclusion run). Is there a general consensus to be in the market next week, or rather wait for Jan'22?

Aside from the above, I am considering doing one Mar'22 -1000/+1100 BPS @ $70ish (or whatever the number is today), just to see how long expiration BPS work. Max risk seems manageable - and I do consider TSLA above 1100 by then a near certainty.

View attachment 746959

ITM BPS - interesting looking trade, very good risk/return, 10x of those for only $100k margin. Biggest risk, of course is there's a long time for some kind of negative news to come out keeping the SP below $1000 - as we saw these last weeks, these things can be most unexpected

 

[Drezil]

So.... I'm not in the market this week for various reasons. One of which is my desire to see Elon finishing his selling, which I expected before XMAS. I am looking at 12/31 though, to nibble back some of my fat-finger loss from last week.

I've not traded options over XMAS period before (other than some calls I purchased last year on the S&P inclusion run). Is there a general consensus to be in the market next week, or rather wait for Jan'22?

Aside from the above, I am considering doing one Mar'22 -1000/+1100 BPS @ $70ish (or whatever the number is today), just to see how long expiration BPS work. Max risk seems manageable - and I do consider TSLA above 1100 by then a near certainty.

View attachment 746959

I opened a dec 31/jan 22 1050 Calendar Call with similar outlook.

Strategy: pocket 5$ premium if we are below 1050 on year end. If we land above then roll out & up 1 week before expiry/as soon as we touch 1050.

Ideal return: use aggressive selling of calls above 1050 to extract maximum premium. Should be ~2k/week per contract if opened ATM & expire worthless each week.

Downside risks: if we rise too fast then roll out & up is not possible anymore & the jan call is not rising as fast as the short call.

i opened the position @20$, currently worth ~24$. On 1050 at year end it will be worth 40$ & then diminish symetrically from there (unless the short call is closed/rolled).

This is a bit more agressive than the LCC we usually have around here - the underlying 1050 will expire in 1 month. But it is a thing that can be VERY lucrative if rolled correctly in rising environments, while also being able to pay off the premium payed for the underlying 1050 call with short calls until that expires if no such rise occurs and we just stagnate.

 

[TheTalkingMule]

You gotta be kidding.

I admit that was difficult to type with a straight face. Was mostly thinking of people other than myself.

 

[jeewee3000]

There's value in not having to watch the ticker, care, or manage for 3 months.

Straight puts vs BPS is considerably more risk.

So far less risk, heartburn and work.....for the same return. That's the whole point.

Can't agree with this. The straight put might have more $ "at risk" per trade, but the March 2022 BPS 1000/1100 is far more risky IMO.

If the BPS goes against you (macro's could shove us under $1000 for a year for example) you lose $10k immediately or have to fork up extra dough to widen the spread and roll out. (Or you roll out and up which inceases risk yet again).

If the straight put goes against you, you just roll it out at the same strike, for profit. As long as you need to.

Of course, if you compare one put versus one BPS, the money at risk is less in the case of the BPS. BUT normally you'll do either one put (pretty riskfree) or a bunch of BPS (higher risk).

The heartburn and risk therefore, lies with the BPS in my case. Not with the put. (But with the BPS you get greater returns against your capital).

A final note I'd like to make, especially to our newer option members, is that nothing is a certainty. I'm also anticipating a return above $1100 after Q4 earnings, but for all we know margins are hit this quarter and the stock sells off back to the low 900's.

TL;DR: don't bet the farm. Have a strategy for when your trade goes against you BEFORE entering the trade.

 

[corduroy]

You could do weeklies for $7-10 each and come out farther ahead or the same and have many more management options - in addition to IV spikes increasing return.

Wow, are you really seeing those kind of returns? I am only targeting $2-3/week on each $10k backing.

 

[TheTalkingMule]

Can't agree with this. The straight put might have more $ "at risk" per trade, but the March 2022 BPS 1000/1100 is far more risky IMO.

If the BPS goes against you (macro's could shove us under $1000 for a year for example) you lose $10k immediately or have to fork up extra dough to widen the spread and roll out. (Or you roll out and up which inceases risk yet again).

You might lose $10k per contract......but minus the $7,300 in premiums you already collected. It's certainly a matter of perspective and personal situation, but there's technically far more money at risk in a straight put. Potato tomato.

 

[BornToFly]

You might lose $10k per contract......but minus the $7,300 in premiums you already collected. It's certainly a matter of perspective and personal situation, but there's technically far more money at risk in a straight put. Potato tomato.

No. If I straight Put goes to hell you own the stock. If the spread goes to hell you lose all the money and own nothing.

 

[samppa]

Holy *sugar*, my 5x -1250p were assigned. these were on spread -1250/+1050..
Looks like I've just bought 500 shares, had cash for about half, rest on margin.

Well I will close the long legs at market open and might just hold on to these for now..

 

[Knightshade]

Holy *sugar*, my 5x -1250p were assigned. these were on spread -1250/+1050..
Looks like I've just bought 500 shares, had cash for about half, rest on margin.

Well I will close the long legs at market open and might just hold on to these for now..

and there's our example of the other downside to doing ITM put spreads!

How far out was expiration on these?

 

[TheTalkingMule]

No. If I straight Put goes to hell you own the stock. If the spread goes to hell you lose all the money and own nothing.

That's the residual value of a trade gone wrong, I clearly said risk. Perhaps could have said, "far less funds at risk".

Selling 3 or 5 straight puts to gain the premium of 10 spreads means you're buying $500k in shares if it "goes wrong", vs the spread's max loss of $100k-$73 or $27k.

$27k is less than $500k.