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Wiki Selling TSLA Options - Be the House

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so, i am back 2 weeks later... acct growth over the last 4 weeks is ~26.69% on that grab-and-go mode, dunno if that is low or high but i am just happy to get whatever i can

today i closed all 2/18 BPS at ~73%; tomorrow maybe STO 2/25 -p820/+p720 at the dip... why 820?
  • i think 200SMA=827 as support is good enough - we only breached it once in the last 6 months
  • i have 150SMA as backup support #1
  • i have lowerBB as backup support #2
  • unlikely sp will cross 3 lines in 8 DTE (there's time to escape if that happens)
this is the 1st time i am intentionally doing a BPS roll not on the same day: wait for a better entry instead of rushing to get credits (it's ok to leave $ at the table if probability of success is higher)

i normally don't trust news media, but this one makes me want to be extra cautious

i will be up at the 4am pre-market... if it's bad or the day is ugly, i may reconsider tomorrow's STO and just sit on the bench
 
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Assuming you've been through the OA education series, here are my suggestions.

Regardless of the style of trade you decide to start with (covered call, naked puts, put spreads, call spreads, etc..), do so using small enough sized positions that you could get a max loss in some sort of black swan and it won't hurt your overall portfolio. Small enough to learn from, big enough to get your attention (a single covered call with a $10M portfolio probably isn't interesting enough to keep focused and learn much).

About as close to advice as I'll come is to start with cash secured puts, and share backed covered calls. The rationale is the same in both cases - the max loss on the cash secured put is that you buy 100 shares at the put strike price. The max loss on the share backed covered call is you sell 100 shares at the call strike price.

So pick a strike in each case where, in addition to everything else you consider when choosing your strike and expiration, you are also comfortable with conducting the worst case transaction if that need arises.

The problem with spreads is that they always resolve using cash, and the dynamics are similar yet different enough from the short puts and calls that max losses can be well defined with a maximum size, and reached dramatically easier and faster (really not fun when it happens).


You can see my own starting trades back when I started, at the start of this thread. I think I sold 200 strike puts when shares were around $400. I was so worried about assignment that I went WAY overboard (compared to me today) protecting myself from going ITM and being assigned. Followed that up with some 175s. The point though is that I got started, learned some stuff by having skin in the game, and got paid to learn.


More generally avoid any sort of leverage as you get started. That includes, if possible, using no margin even if that is available. Its easy to add leverage later on as you gain experience.

I guess another question to ponder - is this something you're wanting to dabble in, or is this something that you think -might- become something you see yourself doing for years to come? If it is the latter, then whether you need a few weeks, a few months, or a few quarters to gain experience and knowledge, then who cares? Do some modestly sized trades, try different aggression levels as you learn, and think in terms of the trades generating beer and sushi money.


EDIT: And welcome! May your learning be varied, interesting, fun, and profitable.
Thank you for the informative not advice. Definitely appreciate it.

This is something that I plan on doing in the future, when I'm closer to retirement. I think I'll start with some weekly CC that are +20% OTM and if it comes close to ITM, I'll roll up and out. I don't really keep cash since I used up my dry powder buying the dip.
 
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Wait, so you skipped the first step in the world of options of losing money on buying calls and then asking like an actor in a paid commercial, "There's got to be a better way?!"

I started 4 months ago with CSP in my trading because I had cash just sitting in the bank and CC in my IRA. CSP my goal was just to beat the bank's rate. I paused the CC on the IRA side because I converted shares to LEAPS and I'm just too worried about all the catalysts that could rocket the stock.

In my trading account, I moved from CSP to BPS because I used half the cash to buy some LEAPS and won't be using margin.

Using OTM % guides is a good idea and I try to stay above 15%, 25% if premiums are high enough.
I know you're joking but I did consider buying some YOLO calls for the SP500 inclusion..... but just ended up buying more shares.

Yeah, but premiums aren't great for 15-25% OTM weekly CC. I'm not sure if it's worth the risk... but I think it would be a good learning experience.
 

i normally don't trust news media, but this one makes me want to be extra cautious

i will be up at the 4am pre-market... if it's bad or the day is ugly, i may reconsider tomorrow's STO and just sit on the bench
Lol talk about timing. Futures just took a dump on news Ukraine launching mortar strikes. Maybe you will need to be up at 4am after all.
 
Does anyone have any insight on why I’m having problems rolling my BPS -995/795’s out each week for even or a small credit despite us being $30 over the mid point? Even near the highs today I was still looking at a $2 debit to roll them out.
One idea - look at what a roll of the 995 put by itself might look like. With shares around 920 you are $75 ITM - there won't be a lot of good 1 week rolls $75 ITM if IV is going down. Being $30 above the midpoint you might have better success with a 2-4 week roll.
 
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Does anyone have any insight on why I’m having problems rolling my BPS -995/795’s out each week for even or a small credit despite us being $30 over the mid point? Even near the highs today I was still looking at a $2 debit to roll them out.
Probably because of the wide bid/ask spread on those strikes. And we're not that far above midpoint.
 
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And now ukraine denied it.
Interestingly, last week a talking head on tv speculated that this exact scenario could be manufactured to give Russia the pretext it wanted to enter Ukrainian territory to “protect” Russian citizens there. If this is true, things may unfold quickly from here.

TSLA down 1% in premarket on this news after a relief rally from the fed minutes yesterday afternoon.

TSLA seems very sensitive to news as we wait as fast as we can for news on new factories and Q1 deliveries.

I know we are all struggling here in the 800s & 900s, but I feel like we are a couple of decent news reports away from a “face ripper” rally back to $1,100 any time in the next couple of months. I think a crash below 800 is also possible but less likely.

Therefore, I’m treading water with bps that I pushed out to June-December, looking to close them out on a rally. I’m not opening any new weekly or monthly options positions. I am exclusively day trading bps and Bcs, closing everything by eod. It’s going well so far…
 
Probably because of the wide bid/ask spread on those strikes. And we're not that far above midpoint.
The wide bid/ask would be related to the low volume of options at those unusual strikes. @InTheShadows It's generally better to stick with strikes with a higher volume to improve liquidity and fill prices. It also helps to have a lot of other options at a particular strike if there's ever a chance of one getting exercised.
 
My hard and fast Yoona inspired trading got me a 2/18 900/850bps yesterday, but the SP didn't move so I got out with like 10% profit.

I then set up a 2/18 930/970bcs because, and that went up to -10% but now in pre-market it's +25%.

On monday and Tuesday we went up after opening, on Wednesday we ended slightly lower but I still expect a drop to 900 and maybe lower on Friday to scare some put sellers.

So I intend to get out of this ATM position, but not sure if I would take the 25% or hope for 50% or more.
 
Closed my BCS yesterday morning - at $0.25 (they were up over 75% in less than 24hrs). I actually tried closing yesterday at $0.50 before noon (would have been just over a 50% gain in an hour), but it didn't hit. I'm entering an order now for -820/+720 BPS for 2/25 at $7, about 100% higher than what I see as yesterday's close. This is a hail mary, but I will likely revise my ask down depending on the price action in the first hour of trading.

Similar to Yoona, I've decided to make trades based on intraday volatility (adding BPS on 2% down moves, with an 820 floor or BCS with an 1100 ceiling) instead of staying in the market with BPS, which is what got burned in January. Both will be rolled if we breach certain thresholds for max strike improvement. All of this depends on my perception of the macro environment and market sentiment (which right now skews negative in my mind).
 
Closed a few BPS yesterday at 90% profit.
Rolled 2/25 930/630 forward a week same strike @10.7
Rolled and adjusted some 2/18 880/580 to 200 spreads 810/610 forward 2 weeks @4.4
With the proceeds opened 2/25 810/610 @4.15

Next week will try to remember decreasing the spread on my 930/630 to bring the strike down a bit.

I'm slowly managing my pre ER BPS each week making about 1-1.5% along the way. I still have some 3/11 1000/800 I've been rolling 3-4 weeks DTE but someday that SP will rise...
 
Closed my BCS yesterday morning - at $0.25 (they were up over 75% in less than 24hrs). I actually tried closing yesterday at $0.50 before noon (would have been just over a 50% gain in an hour), but it didn't hit. I'm entering an order now for -820/+720 BPS for 2/25 at $7, about 100% higher than what I see as yesterday's close. This is a hail mary, but I will likely revise my ask down depending on the price action in the first hour of trading.

Similar to Yoona, I've decided to make trades based on intraday volatility (adding BPS on 2% down moves, with an 820 floor or BCS with an 1100 ceiling) instead of staying in the market with BPS, which is what got burned in January. Both will be rolled if we breach certain thresholds for max strike improvement. All of this depends on my perception of the macro environment and market sentiment (which right now skews negative in my mind).
Executed the above mentioned BPS at $6

Edit: and in the words of the great Johnny Tran... "too soon junior". Should have left my $7 limit alone.
 
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My hard and fast Yoona inspired trading got me a 2/18 900/850bps yesterday, but the SP didn't move so I got out with like 10% profit.

I then set up a 2/18 930/970bcs because, and that went up to -10% but now in pre-market it's +25%.

On monday and Tuesday we went up after opening, on Wednesday we ended slightly lower but I still expect a drop to 900 and maybe lower on Friday to scare some put sellers.

So I intend to get out of this ATM position, but not sure if I would take the 25% or hope for 50% or more.
Closed at 60% profit.

No clue what to do next.
 
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I sold March 18th 500 calls yesterday at $420. I'm not sure how bad the market reaction will be to the Russian invasion, but short term leverage seemed worthy of sleep loss, so sold. I just put sold $890 puts for 14.20. I may have been too soon, but with shares, I won't be forced to take a loss and my percent hit will be cut by over half. I have a hard time giving up my shares long term, which has lead to other impatient decisions. Assuming I take delivery tomorrow, I'll sell close calls, probably 920 assuming no big rally with war issues -- oil inflation, more supply chain problems and handcuffed fed facing inflation issues. I haven't seen more disconnect between Tesla business and macro\market issues since 2019. Not short sellers and market makers this time, just crazy macros. On the downside, I'm still pushing out a 950-850 BPS every time we get over 920. That expires next Friday and I may not get a chance to push that out again. I expect the Russia situation to hit the open on Monday and an invasion in the hours after the Olympics end. I may short QQQ tomorrow.