Wiki Selling TSLA Options - Be the House

[OrthoSurg]

I am on vacation this week. Cycling in Santa-Barbara in California.
I was on the beach and got a Facetime call from my wife with the kids and she told me not to look to TSLA.
Of course I did, for the first time of the week, and I see -8%.
I thought Elon got poisoned or WWIII had just started.
glad neither of this happened.
Tomorrow will be another hard day for the legs. Hope the SP will climb as much as we do tomorrow.

 

[TheTalkingMule]

NASDAQ PE is sitting at 22.22, down from 26 less than a month ago, and is back in the lower end of the range for 2019. I like that. Keeping it simple.

There's a lot of "growth crap" out there, people are actively trying to identify and eliminate. I also like this a lot.

 

[dc_h]

To roll the 860-810 BPS or wait for a bounce? I really can't believe we're testing this 850 range again. Shanghai reopening, Fremont raising capacity and Austin & Berlin openings going well. Macros are going to win in the short term, regardless of fundamentals. Maybe if I sell some 900 CC's I can force a bounce up to 1000.

*I did it, I sold a couple of 900 CC's. The stock bounced 25 points in about 30 seconds. You're welcome.

 

[Drezil]

To roll the 860-810 BPS or wait for a bounce? I really can't believe we're testing this 850 range again. Shanghai reopening, Fremont raising capacity and Austin & Berlin openings going well. Macros are going to win in the short term, regardless of fundamentals. Maybe if I sell some 900 CC's I can force a bounce up to 1000.

i would roll the moment we dropped to 860 .. because i got burned too much by holding BPS & hoping .. ^^

Just roll out to after the quaterlys (5/27 or so was it)...

 

[juanmedina]

Well all my CC's are safe lol. This price action is so lame... I got 5 shares today. I have a naked 920p for next other than I have no other trades. I really want to trade shares for options but IV still too elevated.... and with the way that the market is moving I am not even sure if is a good idea.

 

[intelligator]

To roll the 860-810 BPS or wait for a bounce? I really can't believe we're testing this 850 range again. Shanghai reopening, Fremont raising capacity and Austin & Berlin openings going well. Macros are going to win in the short term, regardless of fundamentals. Maybe if I sell some 900 CC's I can force a bounce up to 1000.

I have the same spread, just one. Down and out to 13th -800/+750 is slight credit at .85 to .50 at $860 to $865 or so. My thoughts when I opened this spread is that we'd close near 880 and that if I were assigned it'd be okay for some of the same longer term reasons above.

 

[BornToFly]

I don't even really trust those % OTM metrics. I would rather sell the strikes based on support & resistance levels

The 20% rule has held up much better than support levels over the last two years. Read through the last 4 months on this thread.

 

[TheTalkingMule]

The 20% rule has held up much better than support levels over the last two years. Read through the last 4 months on this thread.

Shouldn't we pool our funds and hire a part time data analyst to run scenarios and support this thread? Kidding......but not really.

I've been trying to look at something really conservative, but maintaining return. Like yesterday for instance, selling 5/13 $650/550 got me $1.12 and peaked around $1.53. in a scenario like we're in now, to me that better than doing 20% +5DTE for .75-1%. The extra return let's you sit out certain weeks or pull back dramatically as needed.

As I ease back into selling weekly BPS and look to keep things ultra conservative, leveraging these midweek megadips to a 1.5% safe return into the following week seems perfectly rational. You're beyond 20% out AND already near the bottom of a dip AND way off ATH. Stretching the +5 DTE to 8 or 9 is ok IMO if SP is depressed like this.

 

[BornToFly]

Shouldn't we pool our funds and hire a part time data analyst to run scenarios and support this thread? Kidding......but not really.

I've been trying to look at something really conservative, but maintaining return. Like yesterday for instance, selling 5/13 $650/550 got me $1.12 and peaked around $1.53. in a scenario like we're in now, to me that better than doing 20% +5DTE for .75-1%. The extra return let's you sit out certain weeks or pull back dramatically as needed.

As I ease back into selling weekly BPS and look to keep things ultra conservative, leveraging these midweek megadips to a 1.5% safe return into the following week seems perfectly rational. You're beyond 20% out AND already near the bottom of a dip AND way off ATH. Stretching the +5 DTE to 8 or 9 is ok IMO if SP is depressed like this.

I agree, I tried rolling my 780 short leg to 680 next week, and missed the dip by minutes. I think anything below 680 is safe at this point.

 

[Max Plaid]

I got lucky with the price action today. Closed out this week's short calls in the early dip for pennies, closed this week's puts on the pop, sold calls on the pop, resold the puts on the pull-back... all rather quick and simple in the end

Looked like a lost cause when we hit $843 and GOOGL $2280, but worked out well after that and price action as I expected after the early morning bear-raid

 

[corduroy]

The 20% rule has held up much better than support levels over the last two years. Read through the last 4 months on this thread.

I agree, this is a reliable rule of thumb. I have been selling BPS/Puts through this difficult market for the last year with no losses (knock on wood!), using this guideline. Sometimes I go to 15 percent based on conditions and DTE. I do have to roll occasionally, but usually only 1 week then close.

Some other rules I follow that play a big part in this working:
Only open into strength (down moves)
Don't sell puts right after strong up moves, watch where we are in the trading channel and RSI. Ex, don't fall for first down day after a 5 day rally.
Only use 25% of margin/plenty of cash on hand
Stay conservative/don't get greedy

Edit: I have had losses, usually whenever I try a BCS or anything related to buying calls - which I am horrible at.

 

[vikings123]

@adiggs or anybody else who uses Fidelity.

I'm running into a day trader issue for my ROTH IRA account when I trade the same CUSIP ID multiple times on the same day. Account value is not an issue. I spoke to a couple of Fidelity reps and it seems like there is a check in the Fidelity system that treats these covered calls as "Naked" when you day trade the same option multiple times.

For eg: I sold the May 13 1000 call at market open, bought them back and tried to sell them again after the SP went up after the initial dip. Strange part is it does not allow me sell covered calls for any strike/expiry.

I definitely have enough LEAPS that do not have covered calls against them.

Any thoughts? Or is this a bug in their system. I will move the account to TD(never had this issue there with my wife's account) if they cannot find a solution. Rep was supposed to call me back but nothing so far so definitely not happy with their service.

 

[ReddyLeaf]

@adiggs or anybody else who uses Fidelity.

I'm running into a day trader issue for my ROTH IRA account when I trade the same CUSIP ID multiple times on the same day. Account value is not an issue. I spoke to a couple of Fidelity reps and it seems like there is a check in the Fidelity system that treats these covered calls as "Naked" when you day trade the same option multiple times.

For eg: I sold the May 13 1000 call at market open, bought them back and tried to sell them again after the SP went up after the initial dip. Strange part is it does not allow me sell covered calls for any strike/expiry.

I definitely have enough LEAPS that do not have covered calls against them.

Any thoughts? Or is this a bug in their system. I will move the account to TD(never had this issue there with my wife's account) if they cannot find a solution. Rep was supposed to call me back but nothing so far so definitely not happy with their service.

I think this is an issue with all IRAs. What I have done is switch to another strike, $5 or $10 off. Example: sell a $1000 at opening pop, buyback at MMD 2 hrs later, then wait and sell a $1010 at the next peak, buyback at the next drop. Repeat with 1005 or 1015, 1020 etc.

 

[vikings123]

I think this is an issue with all IRAs. What I have done is switch to another strike, $5 or $10 off. Example: sell a $1000 at opening pop, buyback at MMD 2 hrs later, then wait and sell a $1010 at the next peak, buyback at the next drop. Repeat with 1005 or 1015, 1020 etc.

Yes I think that's the workaround. Does this "Day Trader" error go away after a few days? I don't recall running into this issue on IB or TD so thought it was unique to Fidelity. Thanks for the response.

 

[ReddyLeaf]

Yes I think that's the workaround. Does this "Day Trader" error go away after a few days? I don't recall running into this issue on IB or TD so thought it was unique to Fidelity. Thanks for the response.

If you have done more than two round trips, then your account might be restricted for 6mo, at least that’s the warning I remember seeing. I’ve only done it once, a long time ago when I was real green.

Edit: Ok, just a little levity for today. I just put in a $857.69 buy order for one share and it hit. Looks like I’m able to manipulate the SP.

 

[UltradoomY]

This morning BTO $920 Calls for $10 - STC right at 2pm when the minutes hit and we spiked to $927 for $25 each.
Didn't bet big, didn't catch the bottom... or the top but I did get some Whiskey money which always helps!
Looking to open an IC this afternoon 50 wide, $875 P and $975C - $7.50 each

Edit - IC filled

Update on this IC position - Closed out the Call side Yesterday for $0.30 each and this morning closed out the put side on the pop for $4.50 each -
Net total was $2.70 each but I think I am going to spend it all on heart burn medication tonight instead of Whiskey....

Looking to buy calls for next week at $900 if I can get them to fill before close at $15 each.

Plan is to sell some on a pop to make my money back and hold the rest through the PPI report next week and see if we get another pop.
If we crater on Monday or Tuesday before the report I will be looking to sell some Puts at $795 for $15 - $20 each

Have a great weekend and live to fight another day!

 

[intelligator]

I have the same spread, just one. Down and out to 13th -800/+750 is slight credit at .85 to .50 at $860 to $865 or so. My thoughts when I opened this spread is that we'd close near 880 and that if I were assigned it'd be okay for some of the same longer term reasons above.

I ended up closing the position keeping 96% of the credit when price was just about $864 at 3:45 PM ... didn't want to roll, didn't want to risk after hours dip to cause assignment. The 50 wide 1035/795 IC will expire worthless, hitting 2 for 2 this week!

 

[Yoona]

lesson learned the last 4(?) weeks: covered calls are working really good for me; steady income = slowly accumulating shares... this is in retirement acct so stay 20% OTM and do NOT adjust

food for thought: after all this week's drama, today's Close is just +0.57% OTM intraweek (vs Monday Open)

newbie trader wannabe psychicsaid:

• today's Close is -2.41% OTM from today's Open (prediction was -3%)
• today's Close is 98% probability between Monday's High/Low
• today's Close is between this week's IC guestimate (prediction was 708-979)

 

[Discoducky]

Will most likely be assigned on my -p880s that expired today, non-tax account. Now I'll sell CCs next week for those!

I've got several for next week at 800 and 820.

I'm still loving the wheel.

Have a good weekend all!

 

[adiggs]

To roll the 860-810 BPS or wait for a bounce? I really can't believe we're testing this 850 range again. Shanghai reopening, Fremont raising capacity and Austin & Berlin openings going well. Macros are going to win in the short term, regardless of fundamentals. Maybe if I sell some 900 CC's I can force a bounce up to 1000.

*I did it, I sold a couple of 900 CC's. The stock bounced 25 points in about 30 seconds. You're welcome.

not-advice
but an observation.

Everything you say here about the fundamentals and outlook, I agree with completely. These are also long term reasons why the stock is good to own. Over the next 5 years these things will, inevitably (IMHO), make the share price higher than it is today.

But as short term sellers of options, factors such as these ("Shanghai reopening, Fremont raising capacity and Austin & Berlin openings going well") rarely dominate the share price in the very short term. I now, generously I think, assume that stuff like this will dominate the share price in the first and third month of the quarter.

Separating the long term buy-n-hold related factors, from the short term (<2 week in my world), has been one of the developments in my own approach. It's just too easy for me to see the amazing long term view of things, and get caught up in why that long term view isn't manifesting today in the share price.


I like using the cc's though to draw the share price up. There are times for me where it sure does seem to behave like that. I need to be cautious about selling puts during those times