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Wiki Selling TSLA Options - Be the House

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That's very much opposite of true. At the 'statistical' broad brush level, the P/L of a covered call and an equivalent cash covered put are all but the same.

Of course, those who are familiar with my approach know I'd rather have a CC than a cash covered put...but that's based in nuance, not a first order comparison.



I wouldn't go that far on selling options (for credit) and I'd expand then statement such that if one is good at reading charts one should very much be buying options. But really, it boils up to a combination of The Right Analysis and applying that to The Right Position. Position types (shares, sold options, multi-leg options, shorts vs longs, etc.) are all tools on the same tool belt; they all serve a purpose.

Despite the popularity of this thread, selling options is (or at least should be) generally low on the priority list for anyone involved in the market due to its low return, high capital requirement, and high Risk:Reward...but of course there's certainly a time and place for selling and so it shouldn't be completely removed from one's tool belt.

What's really is important for folks to understand how a position (Any position) returns profit, the corollary risk of that position, and how that position might fit an individual's bigger picture market strategy. For options, the two major upsides over shares are 1) Leverage and 2) Volatility. (Those two are also equivalent downsides FTR). Leverage allows a trader to make (or lose) multiple times on the options vs shares--that one is pretty straightforward. Volatility enables a trader to earn profit at a more favorable rate (with lower risk) than an ~equivalent share position. This one can go both ways--for a bought option, a decreasing volatility environment will work against profit relative to shares and an increasing volatility environment will work for profit.

The bummer for selling options is that leverage is much less...leveragable, if not eliminated vs shares (which I think is your overall point) so one basically ~halves the benefit of options over shares.

So circling back to a trader's analysis skillset, if one is good at reading price charts, one should be directional trading, either via shares or [primarily] buying options. If one is also competent at understanding volatility, one should be layering that logic into their position as well. As a random real world implementation of this logic, maybe a strategy is to only buy options at low volatility, only sell options at high volatility, and only trade shares at mid-volatility.
everyone has different risk/reward and goals with their account. I disagree with you on the covered call. Some of us have big enough accounts that just doing low risk covered calls allows us to be retired. I'm 47, not complaining. I have ZERO interest in trying to guess direction, none, zero, nada. I can sell far OTM calls and rarely have to do anything, knowing that if I do it's an easy adjustment and worst case scenario is my account goes 2-4x from here in a short period of time and I've lost my shares. I'd be absolutely fine with that happening within 2 years. I'd then buy back in at maybe a smaller position and reallocate to other stocks and repeat. I don't care about draw downs in my account at all, I'd hold the shares even without selling CC;s so why would I? I think I can double my position in 3-4 years, throw in another stock split during that time and I couldn't be happier. I don't need to be talked down to, thanks though.
 
The problem here is that he hasn't really said anything new. His talked about this before. Any price action today will purely be because of Macro. Futures are up almost 1% Right now. Hopefully we just keep holding above this 700. But it's flat trading for a while until something new comes out I think. Which is good for options writers.
I hear you, but it was the most visible shout out to Tesla yet... winning the electric vehicle space, buy American, investing in the battery, AI and a revamped power grid.... I think this combined with macro and combined with the fact that a few days post earnings is when price normally goes back up... also FUD cycling out... i don’t know how much it will go up but i think it might be possible.
 
I hear you, but it was the most visible shout out to Tesla yet... winning the electric vehicle space, buy American, investing in the battery, AI and a revamped power grid.... I think this combined with macro and combined with the fact that a few days post earnings is when price normally goes back up... also FUD cycling out... i don’t know how much it will go up but i think it might be possible.
Really hope you are right. I'm holding and im selling covered calls (on some of my shares) too to hedge the downside just in case. Lets have a good Thursday and Friday back to mid 700s please.

everyone has different risk/reward and goals with their account. I disagree with you on the covered call. Some of us have big enough accounts that just doing low risk covered calls allows us to be retired. I'm 47, not complaining. I have ZERO interest in trying to guess direction, none, zero, nada. I can sell far OTM calls and rarely have to do anything, knowing that if I do it's an easy adjustment and worst case scenario is my account goes 2-4x from here in a short period of time and I've lost my shares. I'd be absolutely fine with that happening within 2 years. I'd then buy back in at maybe a smaller position and reallocate to other stocks and repeat. I don't care about draw downs in my account at all, I'd hold the shares even without selling CC;s so why would I? I think I can double my position in 3-4 years, throw in another stock split during that time and I couldn't be happier. I don't need to be talked down to, thanks though.
Totally agree with you here buddy. I entered TSLA late so I don't have as many shares as some of the big players here. But I can definitely already see how rewarding selling covered calls are. I can make $1000 a week just selling calls and that is being quite reserved with the price (15%-20% out or more weeklies). More aggressive sellers are making thousands a week.
 
My take is we will see $710+ as Friday close.. or maybe not. :-D

Sold a few $710 naked puts at $16 Tuesday- så anything above $694 is a win in my books. Else, I should be able to roll out for a profit.

First time I am holding until expiry day with ITM -puts, så this is a learning experience. Exciting and scary. :D

(Just hope to avoid early exercise, as that would stretch my available margin)

@Lycanthrope MMs did buy back 1/3 (?) the open $720 puts yesterday (and sold a bunch of $720C), so you might be correct. Maximum pain now down to $715 from $720, and down from $730 Tuesday.

Do not think they have touched the $700 puts though.. so anywhere between $700 and $720 is in play imho.

Edit: Not sure if I remember correct on the $720 put positions.. $720Cs though are growing.

Edit2: I might close my -p if we get a quick climb up towards $710 at open, and try to sell again when we bounch from 50dma. Try to pick some extra $ from a possible repeat pattern.
 
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In what ways do people utilize Max-Pain with a selling covered calls for income strategy? In general, I sell Monday AM for the following Friday at a strike 5%-10% above market price depending on perception of momentum, and hope to collect both the premium and the capital gain (RothIRA). This works during cycles when share prices are volatile enough for me to reload at a price close to the previous strike when shares were assigned. Works most of the time, but I’ve passed in recent weeks thinking there might be a good pop from ER (not yet!).
 
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Sold options can always be rolled if the SP moves against you, bought options just slowly dry up with no recourse, which is much more painful.

Also keep in mind, a lot of us TSLA investors here may have started learning about options by buying calls in late 2013 or 2014 and watched the stock go nowhere for 5 years. I've done well buying LEAPs on panic dips but otherwise I'm very averse to buying.

Another way I think about it - I'd rather be selling options with the market makers than buying them like other retail chumps.
Just a data point - you can roll a bought call the same way as a sold call... I do it all the time for net credit and to increase time value
 
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Just a data point - you can roll a bought call the same way as a sold call... I do it all the time for net credit and to increase time value

Sure, its the same but also the exact oppsite: (in a less positive way)

A bought options has to be rolled away further OTM = less and less % chance of success.
A sold option can be rolled the same, up and out for cc or out and down for sold put = larger % chance of success.

So rolling a sold option is the opposite of rolling a bought options when you meassure the likelyhood of a successfull outcome- imho.
 
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I have to say for us buy and holders, days like today are amazing!! Thank you wheel thread! I might get to add 10 shares at lower cost!
At this rate, you will be an expert by Friday. Anybody else see the 600,000 shares sold at 11:00? Somebody really wants this down! I’m out of cash, bought back most of my 755s and just waiting for a bounce of the MMD to sell some 720s. Bought one share at 681 and ten yesterday at 694.20.:cool:;) No more buying this week unless I can sell more CCs.

Edit: Max Pain and trading seems to indicate a 699.89 close to me. My -670p is getting really close. Not enough cash to buyback and roll, so I’ll get assigned if we drop below that (oh darn).
 
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Sold 735s but close them to soon at 50%. Is anyone else frustrated with the stock? this blows.
Yes, it's frustrating - I have June 2022 LEAPS that I'd like to sell calls against, but looking for an ATH to do so

But on the other hand, for selling weeklies it is extremely profitable, I've added 32x $TSLA so far this week, so 1% to my portfolio, OK the $ value is down, but at some point will recover

I'm thinking we need GF4 or GF5 production to move things. I'm not even sure FSD will do it - too many skeptics
 
Yes, it's frustrating - I have June 2022 LEAPS that I'd like to sell calls against, but looking for an ATH to do so

But on the other hand, for selling weeklies it is extremely profitable, I've added 32x $TSLA so far this week, so 1% to my portfolio, OK the $ value is down, but at some point will recover

I'm thinking we need GF4 or GF5 production to move things. I'm not even sure FSD will do it - too many skeptics

I'm thinking about rolling down my 730s, which have lost 85% of their value in a few hours. The MM's are giving us a gift, and I want to buy more shares.
 
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