Wiki Selling TSLA Options - Be the House

[JustMe]

Playing with some numbers. Still have 600X 850/1050 BPS for 1/14. I can roll all of them to 1/28 and pocket $1.2M. Or I buy them all back and sell 400X 1/28 850/1050 for a small debit, and then open 200X completely new positions like 750/950 for 1/28 for about $600k. So I roll 1/3 of them down for 1/2 the profit. Would seem like a no brainer to take the safe option except I'm pretty darn confident we are over 1050 in 2 weeks and I hate to lose out on $600k....

On Monday I was sure we’d close well above $1,026 this week.

The 1 month chart is a bit sobering. I’m going to err on the side of caution for a bit ..

Good luck

 

[vikings123]

I am trying to figure out what the floor is after reading Papafox 21/1 maxpain post of 700. I don’t think my Puts want to be rolled to the basement.

I read the post and not sure I understand the implications. I see very high OI for the 800 and 900 strikes. If these are already hedged why should we be worried?

I think the max pain data is skewed because of the LEAPS and probably not material to the stock price. Thoughts?

 

[Boomer19]

Papafox said : >> I suspect most all the super-deep-in-the-money calls expiring Jan21 have already effectively reached a delta of 1 or nearly so, and there's no need for additional hedging on them.

He also said: >> I'm going with door number two as my explanation for TSLA's surprising inability to climb on Thursday.

where door#2 is the heavy selling was to keep the out-of-money calls from coming to in-the-money due to the high number of such open positions.

Tesla Facts provided a great 7 part thread explaining dropping the share price is done both by short selling but more so by buying puts which resulted in a put gamma squeeze and the current huge 7%-9% short position. On the other side of the trades, heavy buying at times yesterday significantly lessened the price drops.

He echoed @Papafox that deep in the money LEAPS expiring is not a concern.

Responding to a question of will there inevitably be a rebound, he said: >> Depends on the macro sentiment, but yes, yesterday's buying pattern and reversal was pretty bullish.

https://twitter.com/x/status/1479438195129556993

thx @jw934

 

[BrownOuttaSpec]

Playing with some numbers. Still have 600X 850/1050 BPS for 1/14. I can roll all of them to 1/28 and pocket $1.2M. Or I buy them all back and sell 400X 1/28 850/1050 for a small debit, and then open 200X completely new positions like 750/950 for 1/28 for about $600k. So I roll 1/3 of them down for 1/2 the profit. Would seem like a no brainer to take the safe option except I'm pretty darn confident we are over 1050 in 2 weeks and I hate to lose out on $600k....

Thanks for posting that. I still have my 1/14 850/1000 BPS and that made me feel better about still holding onto them. They are WAY too close to the sun for me now but I opened them when we were in the high 1100's on Monday. Live and learn.....

 

[wooter]

Thanks for posting that. I still have my 1/14 850/1000 BPS and that made me feel better about still holding onto them. They are WAY too close to the sun for me now but I opened them when we were in the high 1100's on Monday. Live and learn.....

Indeed. Over the few weeks I've had bps at 945, 1045 and now 1100 because the SP was steadily between 1050 and 1120 after Elon was done selling. Even after the P&D numbers we were for almost 3 days above 1100, and assuming the Wednesday drop to 1080 would recover on Thursday.

I mean, a few weeks ago I was worried about having 1255/1400bcs .

You know, 20% less than 1100 is 880. 20% more than 1100 is 1320. Maybe a 440 spread is safe for TSLA?

 

[BornToFly]

This makes me feel better, and why I'm tempted to not roll down.... We should have an upward move coming....

https://twitter.com/x/status/1479814272624611333

 

[BornToFly]

Thanks for posting that. I still have my 1/14 850/1000 BPS and that made me feel better about still holding onto them. They are WAY too close to the sun for me now but I opened them when we were in the high 1100's on Monday. Live and learn.....

My Not-Advise is to not touch those unless they go ITM, or you get to a reasonable profit. If they do go ITM, you will get better rolls if you roll closer to when the SP is 980 than 950....

 

[BornToFly]

I'm tempted to actually buy calls on this dip. However, with all the BPS I already have that are now a little ITM, buying calls is placing the same bet (that the SP is going to recover). So if it doesn't recover, I actually increase my losses. The proper play would be to sell BCS, but I don't want to get burned by a significant correction, which I feel has a "more likely than not" chance of happening. So I sit on my hands for at least a couple more trading days, or a drop to 1000 that would make me roll my 850/1050s.

 

[EVCollies]

I'm tempted to actually buy calls on this dip. However, with all the BPS I already have that are now a little ITM, buying calls is placing the same bet (that the SP is going to recover). So if it doesn't recover, I actually increase my losses. The proper play would be to sell BCS, but I don't want to get burned by a significant correction, which I feel has a "more likely than not" chance of happening. So I sit on my hands for at least a couple more trading days, or a drop to 1000 that would make me roll my 850/1050s.

I BTO a few 1/14 1100 calls yesterday and have great hopes. I also fat fingered BTO a 1/21 1035 Put, will try to STC first thing Monday AM if we get an MMD.

 

[Boomer19]

I'm tempted to actually buy calls on this dip. However, with all the BPS I already have that are now a little ITM, buying calls is placing the same bet (that the SP is going to recover). So if it doesn't recover, I actually increase my losses. The proper play would be to sell BCS, but I don't want to get burned by a significant correction, which I feel has a "more likely than not" chance of happening. So I sit on my hands for at least a couple more trading days, or a drop to 1000 that would make me roll my 850/1050s.

i started buying short term calls last few days in addition to that bps (in lieu of larger share purchases and sells)

another data point to gary’s stats. give the latest all-in podcast a listen. from about 27:20 to 34-35min in is a decent synopsis of the last few couple months

Sacks ripped the FED for the minutes (this week) basically being disconnected from the announcement (a few weeks ago) - said the fact that growth has overshot to the downside more than indexes may mean there’s some more room to go down. (although the chart they were referring in the beginning of the segment was SaaS EV to 12mo. revs vs the indices)

CP talked about the significance of the 10yr and smart money dialing back 1-2 months ago, but now much of the froth on high flyers is washed out. so the odds are a bit better of stabilization than they were a week ago.

theres some really key points in that 8-9 min but the whole pod was decent. i’ve found the series very helpful, whether or not you like them individually
(sometimes, all the time, or never), or not

edit: sorry here’s the link

 

[jeewee3000]

Just an observation: many here are buying calls to anticipate a rebound. Note that the rally (if it does come) must happen soon enough and with decent 'ferocity' for the calls to be big winners. So a lot has to go right before you make decent money. They are pure gambles.

Again, not dissing those that BTO calls (they have infinite upside and can put you way ahead), but there are safer options to anticipate a reversal (cough BPS or puts cough).

 

[bkp_duke]

I'm tempted to actually buy calls on this dip. However, with all the BPS I already have that are now a little ITM, buying calls is placing the same bet (that the SP is going to recover). So if it doesn't recover, I actually increase my losses. The proper play would be to sell BCS, but I don't want to get burned by a significant correction, which I feel has a "more likely than not" chance of happening. So I sit on my hands for at least a couple more trading days, or a drop to 1000 that would make me roll my 850/1050s.

I had the exact same thought, I just couldn't figure out what date for the calls, and how far out.

 

[bkp_duke]

Just an observation: many here are buying calls to anticipate a rebound. Note that the rally (if it does come) must happen soon enough and with decent 'ferocity' for the calls to be big winners. So a lot has to go right before you make decent money. They are pure gambles.

Again, not dissing those that BTO calls (they have infinite upside and can put you way ahead), but there are safer options to anticipate a reversal (cough BPS or puts cough).

Agreed. If I were to do this, it would be YOLO money (like what @Lycanthrope does). Something that I won't miss too much if it goes south, but would be some sweet sweet icing on the cake for a rebound.

Not advice, of course.

 

[Boomer19]

Just an observation: many here are buying calls to anticipate a rebound. Note that the rally (if it does come) must happen soon enough and with decent 'ferocity' for the calls to be big winners. So a lot has to go right before you make decent money. They are pure gambles.

Again, not dissing those that BTO calls (they have infinite upside and can put you way ahead), but there are safer options to anticipate a reversal (cough BPS or puts cough).

we’ll, what’s the cutoff for “short term” versus “long term”. i consider anything less than a year out expiry to be short term (maybe i’m wrong and shouldn’t follow the tax definition version)

but..one can do multiple strategies as well like you said.

 

[Boomer19]

I had the exact same thought, I just couldn't figure out what date for the calls, and how far out.

i did apr as more of a “whatever happens” play. i originally was going to do leaps, then oct (i figured Oct bc plenty of catalysts and time for maneuvers).

instead i did apr with an amount of money i was comfortable with then put on a separate longer term strategy. my buddy ended up doing a bit of the oct plays

 

[bkp_duke]

i did apr as more of a “whatever happens” play. i originally was going to do leaps, then oct (i figured Oct bc plenty of catalysts and time for maneuvers).

instead i did apr with an amount of money i was comfortable with then put on a separate longer term strategy. my buddy ended up doing a bit of the oct plays

Close or far strikes for the Apr and Oct calls?

 

[Boomer19]

Close or far strikes for the Apr and Oct calls?

apr 1225
i think he’s oct 1200

not sure either of us plan to hold that long. playing earnings.

now if we break the next two levels of support this week, i guess i’ll avg down some, and then look to break even or make a little. like i said…”whatever” play

but i think we should settle at some point. everyone and their mother knows earnings will be very good. the problem is that it’s more than 2weeks away (likely 26th), and we need to deviate from this inept Fed bs. the fundamentals of the good companies need to take control of the narrative. if earnings season responds well in the beginning maybe that will negate some of what happened last week. and if the latest round of shorting (fact-checking tweets) needs to de-lever into earnings…well that will help.

 

[BornToFly]

We really need some good news to give us support until we get closer to earnings. I don't know if increasing the cost of FSD will be perceived as a positive or negative on Monday.

 

[tivoboy]

I credit AND BLAME @Boomer19 for linking to this thread, now I'm trying to do the calcuation and time allocation for how long it's going to take me to read through 721 pages!

KAAAAHHHHNNN!!!!!!

 

[JustMe]

We really need some good news to give us support until we get closer to earnings. I don't know if increasing the cost of FSD will be perceived as a positive or negative on Monday.

I don’t think FSD price increase is significant news, but it’s definitely not bad news for TSLA valuation. It’s not reflective of increasing cost of developing FSD - it’s a sign of confidence that L4 is imminent.

What we really need is an announcement of Austin or Berlin opening dates. That might not come until earnings, though