Wiki Selling TSLA Options - Be the House

[Knightshade]

The BPSes that were all max loss back in late Jan/early Feb that I rolled out to 4/14 (-1000/+875) I could now buy back at very near the sum of the credits I've gained by opening and rolling the position... (like $1ish per share loss instead of $100 share loss!)... still gonna let some time burn off though, I don't see any position I'd LOVE to jump into with the cash it'd free up taking the loss now....

Right now my thinking is maybe wait for next Monday and close (ideally profitably by then) on a post P&D spike.... anybody have any thoughts why this is a bad plan?


As for CCs, I've got em all underwater in 3 accounts now... gonna definitely wait till later in the week to figure out what I want to do with those, see if there's any pullback/gap fill... and it may be a different answer in each account... (one set is -985 in a cash account against LT shares.... one set is -965 in an HSA against shares....and third set is against LEAPs held in an IRA).

 

[elasalle]

sold 1375 CC ~ .80+ cents. Delta .02 ..... some more pennies for this week

2 more votes/shares

 

[adiggs]

When I sell covered calls, I sell them at a date and strike price with which I would be happy to have them get exercised. That's the case here. Kicking myself for this particular trade, but thrilled with the SP increase for my entire portfolio.

NOT-ADVICE
One idea that I've had come up and to be considered - if you aren't on a defined schedule for a covered call to be resolved, one idea is to roll it out a long ways for a lot of strike improvement. The notion is to decide that you're going to sell - but would you rather sell for 920 today, or 1500 in June 2023? (I made up the numbers to illustrate the idea). Granted that locks up the underlying shares or purchased call, but $400 better sale price in 15 months may be a particularly good outcome.

Of course it might also be that you wait a year, the call is on track to be OTM, and you collect the net credit on that last roll for a 14 month trade - not so great


Just an idea.

 

[Blitz3RS]

Yowzers what a morning!

So a few weeks ago, STO x9 12/16 1500Cs prior to this never-ending huge run-up; not looking for advice per se, but purely some seasoned opinions (I'm a super rookie).

How likely are we looking to finish the year >= an SP of $1500? I'm still waiting patiently for 12 Apr, as I'm really thinking this is a chance of a pullback to make an exit.

Also, I'm really new to the concept of rolling calls for pushing an expiration/strike out. My questions would be:

1. How long do you all (personal opinions) wait to make a decision to do a roll (esp. in this scenario of a 1500 for 12/16)? Given all the positive Tesla news coming prior to CPI numbers (P&D, today's news, etc, Giga Austin event, etc...) I'm thinking about just biting the bullet, taking the loss and spending the rest of the year conservatively selling calls to hopefully end back to where I was at before this debacle.

2. Or do I wait closer to the actual expiration date? Or as it gets closer to ITM?

Thanks for any opinions, which will just shape my own decision (i.e. your inputs are not advice

 

[adiggs]

NOT-ADVICE
With the big move this morning the 900 puts for this Friday are doing nicely. I'm leaving them open - still have .60 to earn. The smart thing to do is take the early close in case this big move regresses tomorrow.

EDIT: If its a good exit, then its a good exit. Decided to market close those puts for around .57. I might miss out on the other .40 or .50 tomorrow but I'm also ready for a big regression now as well


I opened 1200 strike calls for this Friday for $6. For many of the shares and underlying purchased calls they are on a schedule and selling at 1200 on Friday is better for me than waiting for a spike on Monday after production report. I expect a big spike on Monday but selling at 1200 when I've been wresting with selling at 900 or lower the last month is a really good deal.

I've got some shares that aren't on a timer but I do want to take assignment on some of them - I think the first cc at 1200 is a good place to start. The rest will be rolling if necessary. I haven't yet chosen later strikes to take assignment on. Last time I tried this on the put side, I didn't take assignment on the 800s when I had that chance. *sigh*


I see a lot of catalysts over the next year, some + and some -.
+ Tesla becomes viewed as an inflation and interest rate safe haven (continued great production and financial results)
+ Berlin and Austin come online and ramp faster than generally expected
+ Ukraine war resolves in favor of Ukraine. This mostly means, to me, that Russia falls back to at least the original borders and Ukraine has no particular constraints on joining EU, NATO, or on how they build their military from here. Russia has no choice but to respect Ukraine as an independent nation, at least pragmatically (whether they ever do formally).
- Russia ups the stakes in Ukraine with some tactical nukes.
- Inflation keeps going up
- Interest rates go up farther and faster
+ stock split actually happens out in the August / Sept / Oct timeframe. I don't expect an out of cycle shareholder vote on the share authorization - just a steady drip of pressure on short sellers (those that manufacture shares - not those that borrowed shares), and that will provide a steady low-grade buy side pressure as the float shrinks. I'm hoping for another 5:1.

The downside to a stock split - we're going to be using a lot more options, and that will mean more commissions. On a 5:1 split that $6 1200 strike call I just sold will be 5x $1.20 240 strike calls. It's the same thing with more commissions. And a tighter range for the credit to evolve, so holding to $0.20 instead of 0.50 becomes a thing.


My bias is up in the very short term, and up over the year. I'm positioning to take particular advantage of a share price increase this week and next, and am even considering buying calls for the production report. Of course so will everybody else, so maybe not Maybe I'll be buying some puts for when the share price spike takes a temporary regression.

 

[adiggs]

Yowzers what a morning!

So a few weeks ago, STO x9 12/16 1500Cs prior to this never-ending huge run-up; not looking for advice per se, but purely some seasoned opinions (I'm a super rookie).

How likely are we looking to finish the year >= an SP of $1500? I'm still waiting patiently for 12 Apr, as I'm really thinking this is a chance of a pullback to make an exit.

Also, I'm really new to the concept of rolling calls for pushing an expiration/strike out. My questions would be:

1. How long do you all (personal opinions) wait to make a decision to do a roll (esp. in this scenario of a 1500 for 12/16)? Given all the positive Tesla news coming prior to CPI numbers (P&D, today's news, etc, Giga Austin event, etc...) I'm thinking about just biting the bullet, taking the loss and spending the rest of the year conservatively selling calls to hopefully end back to where I was at before this debacle.

2. Or do I wait closer to the actual expiration date? Or as it gets closer to ITM?

Thanks for any opinions, which will just shape my own decision (i.e. your inputs are not advice

Timing - there are two competing factors that I consider. If I get really close to expiration then as much of the time value can decay as possible. The downside is that the quality of the roll gets worse and worse as the position goes deeper and deeper ITM. For a December option I probably wouldn't consider a roll until the summer at the soonest. There is plenty of time for the option to go ITM and then back OTM due to macros or a single match / miss quarterly result.

Another thing to consider - is taking assignment at 1500 and keeping the credit all that bad of a thing? I did this before - sold 4200 strike calls with shares around 1500 (pre-split). I figured the account would be up 3x if somehow those 4200s went ITM. Now we're at 5500 pre-split and I was really unhappy with the big move But something to consider. Its one reason for the general idea of selling cc at a strike that you're ready and willing to deliver the shares at. It isn't always possible at relatively low share prices, but the idea is still something to consider.

 

[ReddyLeaf]

I guess several of us are in the same situation: short covered calls that are ITM now (or in my case, DITM).

When I sell covered calls, I sell them at a date and strike price with which I would be happy to have them get exercised. That's the case here. Kicking myself for this particular trade, but thrilled with the SP increase for my entire portfolio.

As I don't have the cash available to swap these for puts and the rolling options are not very appealing, I may just let these get exercised. Then decide whether to just buy back as many shares as I can with the proceeds, or start to play the wheel. I'm kinda thinking the wheel, if for no other reason than for the experience/learning.

This is fair warning to you all. With my timing, as soon as my CCs get exercised and I write cash covered puts, you can be sure the SP will drop precipitously.

The true wheel means that you sell puts at the same strike as the shares were called away. That way you collect premiums on both sides. However, this really only works well when the SP is +/- but flat overall. TSLA has been a massive roller coaster and improperly timed options sales can mean “selling low” (e.g., CC at 900) and “buying high”(CSP at 1100). Ask me how I know.

 

[WattsHappening]

NOT-ADVICE
One idea that I've had come up and to be considered - if you aren't on a defined schedule for a covered call to be resolved, one idea is to roll it out a long ways for a lot of strike improvement. The notion is to decide that you're going to sell - but would you rather sell for 920 today, or 1500 in June 2023? (I made up the numbers to illustrate the idea). Granted that locks up the underlying shares or purchased call, but $400 better sale price in 15 months may be a particularly good outcome.

Of course it might also be that you wait a year, the call is on track to be OTM, and you collect the net credit on that last roll for a 14 month trade - not so great


Just an idea.

Yep, thanks for this. I've already considered it and will continue considering it throughout the week. Unfortunately, my CCs are so deep in the money (4/1/2022 cc860) that any potential rolls out to 2023 or 2024 seem like bad trades.

Earlier, as the SP was moving up but before it went crazy, I could have rolled these to Jan 2024 cc$2,400. I considered it at the time as that would have been a date and strike price that I would have been happy to take. But I decided to wait it out a few more days. That turned into the current situation where the best I could do for no debit would be Jan 2024 cc$1,600 or June 2024 cc$1,800. (All of the above are credit/debit neutral trades.) Neither are appealing to me.

I will watch what happens the rest of the week. If the SP drops to where a far-out roll like you suggested makes more sense, I may do that. But assuming continued SP increases to expected levels, I think the better long-term play is to eat the loss now.

Live and learn. That's my take-away. This was a great, albeit expensive, learning experience. I would still prefer this to say, the SP still be-bopping down in the $800s and my CCs expiring worthless. All my other long shares and owned LEAPs are very happy with the current SP.

 

[MP3Mike]

The downside to a stock split - we're going to be using a lot more options, and that will mean more commissions. On a 5:1 split that $6 1200 strike call I just sold will be 5x $1.20 240 strike calls. It's the same thing with more commissions. And a tighter range for the credit to evolve, so holding to $0.20 instead of 0.50 becomes a thing.

Yes, 5x, or 10x, the trade commissions will suck. I will have to go back and ask for another discount. (They gave me a 60% discount on the option fees last time I asked, so I'm not sure they can go much lower.)

 

[adiggs]

Yep, thanks for this. I've already considered it and will continue considering it throughout the week. Unfortunately, my CCs are so deep in the money (4/1/2022 cc860) that any potential rolls out to 2023 or 2024 seem like bad trades.

Earlier, as the SP was moving up but before it went crazy, I could have rolled these to Jan 2024 cc$2,400. I considered it at the time as that would have been a date and strike price that I would have been happy to take. But I decided to wait it out a few more days. That turned into the current situation where the best I could do for no debit would be Jan 2024 cc$1,600 or June 2024 cc$1,800. Neither are appealing to me.

I will watch what happens the rest of the week. If the SP drops to where a far-out roll like you suggested makes more sense, I may do that. But assuming continued SP increases to expected levels, I think the better long-term play is to eat the loss now.

Live and learn. That's my take-away. This was a great, albeit expensive, learning experience. I would still prefer this to say, the SP still be-bopping down in the $800s and my CCs expiring worthless. All my other long shares and owned LEAPs are very happy with the current SP.

I'd guess that somewhere around 1 year you'll get the bulk of that strike improvement. Which might be a better choice.

And if the shares keep going past 2000 then buying out the loss now might be the best choice. If only there was a single right choice and it was obvious


My beginning of year debacle would be back to neutral or even profitable with this big run up. Unfortunately I'd have been paying debits to get here or have rolled out to something like June 2023 in which case the debacle wouldn't be resolved. The market can remain irrational, or at least cantankerous, for much longer than I can remain solvent. *sigh*

Then again buying out some 760 calls a couple of weeks ago is looking brilliant ...

 

[adiggs]

The true wheel means that you sell puts at the same strike as the shares were called away. That way you collect premiums on both sides. However, this really only works well when the SP is +/- but flat overall. TSLA has been a massive roller coaster and improperly timed options sales can mean “selling low” (e.g., CC at 900) and “buying high”(CSP at 1100). Ask me how I know.

For real.

I'm aiming for a modified version of the wheel. The individual put and call sales are intended to avoid assignment. But when the share price is particularly low I want to take assignment on some puts. And when the shares are particularly high I want to take assignment on some calls. But this is also consistent with my focus on income rather than capital gains - I'm risking missing out on most of a run to 2400 in exchange for high current income. I'll really hate missing out on a run to 2400 from here, but I'll also be ahead on income if we bounce off 1200 or 1300 and go back down. And either way I'll have a more consistent month to month income.

In general, at a middling share price (I think around 1050 right now), I would like to be around 1:1 puts and calls. At 800 I'd like to be 1:3 puts and calls. And at 1200 more like 2:1 puts to calls (more calls in general, for more exposure to that hypothetical move to 2400).

 

[TheTalkingMule]

Not a bad spike today, but I'm holding off selling CC's until we get some more movement. $1160c peaked at $13.40 and $1210c peaked at $6.92(I think). Wouldn't have been bad to catch either of those, but I missed it and consider that a blessing.

I think I'll target $8 for $1210c and see how tomorrow goes. Sell something more aggressive later in the week perhaps.

 

[intelligator]

Split news, price climb, expectations to deflate, next week an expected rise based on P+D reports, would a ratio call spread be a worthwhile consideration? I though about it this morning but focused instead on booking profits than opening new. Speculating that a +C1150x1/-C1200x3 Apr 1 ratio spread, for instance, could be closed out Thursday or earlier, or possibly expire worthless. I didn't open, curious of view on ratio in place of a BCS. Thoughts?

 

[scubastevo80]

For real.

I'm aiming for a modified version of the wheel. The individual put and call sales are intended to avoid assignment. But when the share price is particularly low I want to take assignment on some puts. And when the shares are particularly high I want to take assignment on some calls. But this is also consistent with my focus on income rather than capital gains - I'm risking missing out on most of a run to 2400 in exchange for high current income. I'll really hate missing out on a run to 2400 from here, but I'll also be ahead on income if we bounce off 1200 or 1300 and go back down. And either way I'll have a more consistent month to month income.

In general, at a middling share price (I think around 1050 right now), I would like to be around 1:1 puts and calls. At 800 I'd like to be 1:3 puts and calls. And at 1200 more like 2:1 puts to calls (more calls in general, for more exposure to that hypothetical move to 2400).

Adiggs - just so I understand, you'd be selling 3x as many calls (versus puts) at a lower share price and the opposite at a higher share price? I may be thinking about this backwards, but would assume one would want more puts at a lower price (forced to buy low) and more calls at a higher price (forced to sell high). Am I thinking about this right? This is a someday strategy for us - not nearly enough capital to do this at present so we have to stick with spreads.

 

[EVCollies]

Well, finally all my Elon Stock Sale BPSs are back OTM, I had been rolling forward a week or two until 2/22 when I rolled 2 months forward, usually flat, usually for a little money. Today I was recalling that date in 2/22 when I thought I would lose all my cash with the BPSs.

They are all about 45 DTE now and will continue to roll them as monthlies at 30sh DTE to decrease the stress in my life...

 

[scubastevo80]

Split news, price climb, expectations to deflate, next week an expected rise based on P+D reports, would a ratio call spread be a worthwhile consideration? I though about it this morning but focused instead on booking profits than opening new. Speculating that a +C1150x1/-C1200x3 Apr 1 ratio spread, for instance, could be closed out Thursday or earlier, or possibly expire worthless. I didn't open, curious of view on ratio in place of a BCS. Thoughts?

~$6 debit to make about $4400/contract if it goes to $1200 in 4 days. I guess anything could happen, but I don't personally expect another 10% run until we have P&D numbers. I'm really waiting for a pullback day, but I've been saying that for a week so what do I know...

 

[BornToFly]

The downside to a stock split - we're going to be using a lot more options, and that will mean more commissions. On a 5:1 split that $6 1200 strike call I just sold will be 5x $1.20 240 strike calls. It's the same thing with more commissions. And a tighter range for the credit to evolve, so holding to $0.20 instead of 0.50 becomes a thing.

With the first stock split, I found that I was able to make a lot more money after the split, even though the premiums were lower on single trades, because I was able to do many more contracts. I'm very excited for this split.

 

[ReddyLeaf]

Not a bad spike today, but I'm holding off selling CC's until we get some more movement. $1160c peaked at $13.40 and $1210c peaked at $6.92(I think). Wouldn't have been bad to catch either of those, but I missed it and consider that a blessing.

I think I'll target $8 for $1210c and see how tomorrow goes. Sell something more aggressive later in the week perhaps.

Considering something similar, maybe -c1260s @$6, though waiting until Wednesday because of being burned badly the past few weeks.

 

[intelligator]

~$6 debit to make about $4400/contract if it goes to $1200 in 4 days. I guess anything could happen, but I don't personally expect another 10% run until we have P&D numbers. I'm really waiting for a pullback day, but I've been saying that for a week so what do I know...

Ooops, was looking at 1125/1175 which is too narrow and close although an initial credit of about 8 , then wrote above using an example at 1150/1200... that's two typos for me today Thanks for picking up on that!

 

[Zextraterrestrial]

Stock split incoming.

Time to flip all cc's to puts.

I bought all my sold calls last week and bought calls + sold more puts. fantastic timing.
sold 1 apr1 1050c at the exact peak today, probably not its peak, but I have another
Thank you 2 @Drezil for taunting me to this side of stock trading & a few others... always curios about what BTC was, STO? I know other acronyms for those
how do people keep track of options? I figured something like this made most sense & is easy enough. 1st column not shown is total gain which is $78k at todays prices. Close one and I just hide the row.
started this year & January sucked + I was buying calls...

current Gain		open date	BTO	STC	STO	BTC	Close Date	price	low/high	target?
10272.14	j20 23 1200p	2/11/2022			39999.14			29727.00	29500	10000
19049.34	j19 24 1000c	2/22/2022	21390.66					40440.00	41000	200000
4044.34	ma20 900p	3/22/2022			6999.34			2955.00	3000	500
4044.34	ma20 900p	3/22/2022			6999.34			2955.00	3000	500
1134.33	apr29 850p	3/23/2022			2099.33			965.00	944	200
1134.33	apr29 850p	3/23/2022			2099.33			965.00	944	200
2767.32	apr14 975p	3/23/2022			4334.32			1567.00	1585	400
2767.32	apr14 975p	3/23/2022			4334.32			1567.00	1585	400
1669.34	apr8 1150c	3/24/2022	1200.66					2870.00	3240	5000
1669.34	apr8 1150c	3/24/2022	1200.66					2870.00	3240	10000
3406.34	apr1 1050c	3/24/2022	2100.66					5507.00	6000	10000
2532.32	apr14 975p	3/25/2022			4099.32			1567.00	1585	200
367.32	apr29 1000p	3/28/2022			4499.32			4132.00	3950	1000