Welcome to Tesla Motors Club
Discuss Tesla's Model S, Model 3, Model X, Model Y, Cybertruck, Roadster and More.
Register

Wiki Selling TSLA Options - Be the House

This site may earn commission on affiliate links.
Not Tesla, but pretty proud of the efficiency here
1621433928958.png


i can't believe i made $500 against $35,000 in margin on a stock that's 23% away from current price with two days left to expiry LOL.
 
@adiggs @asburgers @bxr140 @dl003 @Lycanthrope @ReddyLeaf @setipoo @buttershrimp and others, Are you guys working in another full-time job, you know, the usual 8-5ish job? How much of time are these trades taking up in your mind, during your job, family time etc? Do any of you have kids at home? Just the amount of posts, the analysis I see from some of you should be taking significant time, at least a couple of hours a day.
I am noticing significant mental energy going into this. I am not saying it's not worth it, especially when the trades are bringing in significant income.
I had a full time job last year and the first two months of this year. So yeah - while I've been learning and finding my own strategy and approach, it's been a couple of hours a day.

I'm totally of the belief that you have to find this fun in order to do it. Not just understandable and like the income - you also have to have fun doing this. And I do.

I'd say my actual time is on the order of 30-60 minutes most days and a couple of hours 1 or 2 days each week. That doesn't include my posting time here - talking with y'all is a different kind of entertainment for me. With 1 exception you're the only people outside of my family that I've found I can talk about this with. Other people I might talk with about this don't understand what we're doing (and don't want to learn - that's ok), and I really don't feel like I can talk about results - even in general terms.


I am mostly able to separate this from the rest of my life. WHen I'm doing this, I'm doing this. WHen I'm not, I'm confident that my overall position is established so that I don't need more than a daily check on the share price. As long as it hasn't moved a LOT (a 5% move or more) then it really doesn't change anything for me. So I'm not doing this.

I make a lot of choices that include optimizing the degree to which this causes me stress and consumes my time when I'm not doing this. I consider these components to be just as important (to me) as the financial components of the optimization.

No kids, at home or otherwise :)


And yes this does consume significant mental energy. In exactly the same way that playing a sport or doing something you really enjoy doing "consumes" a significant amount of mental energy.

I can also readily imagine a time in the future where this stops being fun and starts being more like a job. I didn't retire from one job to start up a new one (even if it IS part time). If/when I arrive at that point, then I am likely to turn the portfolio over to a money manager and pay them their 1-2% to take care of it for me (so I can put all of my time and energy into other stuff).
 
So, in that vein, I was perusing max pain for June 18th monthly and noticed some interesting action today at 1000: 45,000 open calls and nearly half that traded today. I’m interested to see what that looks like for the rest of the week, but it looks like some serious bets on massive P/D numbers for Q2.
One observation I have about max pain - for any weeks outside of the current week, I find that max pain and put/call walls is nearly valueless. If you look at this week option volume and compare it to next week's option volume, there is nearly nothing happening next week. Don't just look at max pain or the put / call walls - also look at the actual volume associated. A big peak at 600 strike means a lot less when it's 2,000 contracts (later week) vs. 20,000 contracts this week.

That 45k call traded that you mention - that sounds significant. But also realize that monthlies are always busier than weeklies (they've been open longer), and the June monthly even more so - it's been open for two years. And STILL - the big action will happen that week of expiration and not before.

May IV just spiked.

If this is close to the bottom, would it make sense to sell max expiry (ie. Mar '23) 500p? Other than the ridiculous bid-ask spreads that's going to be there for over a year. Basically losing theta gains for potential delta?

As somebody that has sold both long dated puts and calls (13 months on a put; 25 months on a call), I can tell you why I will move heaven and earth to avoid doing that again. The primary and simple reason is that the underlying resources are tied up for that long period. In the case of puts the underlying cash will be sequestered until you close the position.

In your specific instance even if the shares go up to $800, the change in the option premium won't be as big as you'd like. Even at $800, a March '23 500 put will still retain significant value. You might get to a 2/3rds profit; most likely even 1/2 will need a big move and will be significantly smaller than buying shares or calls would have been.

I DID sell a put with some of that same mindset, but my intent was immediate income in exchange for sequesting some cash. I definitely earned less with that decision than if I'd just have bought shares. "Less" is probably 1/3rd or at best 1/2 (though I still accomplished my objective - so no hindsight / regret for me; only the learning that I don't like positions locked up for so long, unable to make meaningful adjustments).
 
Closed my 5/21 600 call position - with today's drop the position was over 80% ahead. I could have waited and probably earned it all on Friday, but I wanted to free up those shares for a new call position. I would normally have rolled straight into a 5/28 covered call, but decided not to right now. I'm debating a split roll on some of my 5/28 puts and I want these shares available to cover those calls, should I decide to do the split roll. Still deciding on this one.

I also rolled some 5/21 640 puts to 5/28 640 puts. The time value was down around $1 or less with so little time to expiration plus so far ITM. I kind of lost track of this position and didn't realize just how close to expiration, and how little time value, there was. I might be rolling this one again in the next day or two - I like to roll deep ITM positions a week before expiration (at most) due to very little time value available to decay in that last week, plus the increasing change of early assignment.


Too much other stuff going on today to make a decision on the split roll idea for the 760 puts. I'll be thinking about this one longer - I might take action tomorrow. I'll stick to a single contract on the put side, so I'm minimizing the potential cost of this education / experience I am about to receive :)
 
@adiggs @asburgers @bxr140 @dl003 @Lycanthrope @ReddyLeaf @setipoo @buttershrimp and others, Are you guys working in another full-time job, you know, the usual 8-5ish job? How much of time are these trades taking up in your mind, during your job, family time etc? Do any of you have kids at home? Just the amount of posts, the analysis I see from some of you should be taking significant time, at least a couple of hours a day.
I am noticing significant mental energy going into this. I am not saying it's not worth it, especially when the trades are bringing in significant income.

This is kind of my job now. I'm not exaggerating when I say that I read 85%+ of my waking hours (15% dedicated to family, food, exercise, and hygiene 😆). As bad as the market is, priority is always with the family and I will always appreciate TSLA for providing me with the opportunity to spend more quality time with them.

So many things are out of our control nowadays - although I do fault myself for not recognizing the dip to this extent (I anticipated much less, for a shorter duration, and positioned my portfolio as such). The other part of this is that I really do enjoy the markets and research. I was pretty close to getting a BB Terminal earlier this year. I balked as I was transitioning to a less risky, more passive portfolio, and onto other projects. However, I made a huge mistake earlier this year with my portfolio construction - mostly risking too much to get the last 10-20% of my goal after the market had been red hot for 9 months.

I sincerely love the amount of sharing in this thread. You guys are awesome, and hopefully I can help contribute more. It's way more fun if we all win together and are able to donate a portion of our gains to charity.
 
At this SP I don't think I feel confortable selling CC's anymore. I am not willing to loose my shares at this prices the SP can turn around in a second.

I haven't been comfortable selling CC's more than a week or two out for a while. Premiums/IV have been crap and the stock has been so far oversold. However, I'm starting to think that the little gains from weeklies can start adding up.
 
One observation I have about max pain - for any weeks outside of the current week, I find that max pain and put/call walls is nearly valueless. If you look at this week option volume and compare it to next week's option volume, there is nearly nothing happening next week. Don't just look at max pain or the put / call walls - also look at the actual volume associated. A big peak at 600 strike means a lot less when it's 2,000 contracts (later week) vs. 20,000 contracts this week.

That 45k call traded that you mention - that sounds significant. But also realize that monthlies are always busier than weeklies (they've been open longer), and the June monthly even more so - it's been open for two years. And STILL - the big action will happen that week of expiration and not before.



As somebody that has sold both long dated puts and calls (13 months on a put; 25 months on a call), I can tell you why I will move heaven and earth to avoid doing that again. The primary and simple reason is that the underlying resources are tied up for that long period. In the case of puts the underlying cash will be sequestered until you close the position.

In your specific instance even if the shares go up to $800, the change in the option premium won't be as big as you'd like. Even at $800, a March '23 500 put will still retain significant value. You might get to a 2/3rds profit; most likely even 1/2 will need a big move and will be significantly smaller than buying shares or calls would have been.

I DID sell a put with some of that same mindset, but my intent was immediate income in exchange for sequesting some cash. I definitely earned less with that decision than if I'd just have bought shares. "Less" is probably 1/3rd or at best 1/2 (though I still accomplished my objective - so no hindsight / regret for me; only the learning that I don't like positions locked up for so long, unable to make meaningful adjustments).

Thanks for this. Actually, I don't mind having that portion of the capital tied up for term tbh. The rest of the concerns are interesting.
 
Are you guys working in another full-time job, you know, the usual 8-5ish job? How much of time are these trades taking up in your mind, during your job, family time etc? Do any of you have kids at home?

I have a fun full time job, a toddler, and another on the way. I spend probably 2-4 hours a week on trading, and that's mostly during slow meetings or late night downtime, etc. I spend WAY more time on TMC than I do on trading. 😉 I live in CA and don't bother with market open or try to time early intraday fluctuations. For me its all about set ups and statistical probability of my analysis.

Just the amount of posts, the analysis I see from some of you should be taking significant time, at least a couple of hours a day.

To be clear, I've long grown out of the "need to make income" mentality that drives folks toward selling recurring options. Its far too much work/time, stress, "gut feel", market timing, and financial risk, and returns far too little profit.

While I certainly have put in plenty of time building my knowledge base (and posting on TMC helps me reinforce that knowledge base), I can look at a chart and in seconds know whether there's a There There (and that I should investigate further) or whether there's not a setup in the near future (and I just move on). That's not some big accomplishment or evidence of some differentiating competency, mind, its simply like knowing another language. I can't read Spanish. I can read stock charts.
 
Yesterday:
STO 605 sc - 8.6 X 6 = +$51.6

Today:
BTC 605 sc - 0.78 X 6 = -$4.68

Decide to close it first although the chance of getting called is limited, but better not to run into the greedy problem again like I did in sp...

Just did the same at $0.97 with my 0521 $605 sto sold 0517 at $7.50, sweet piece of change for a 50-hour investment. Now looking at 0528 (having finally focused on the likelihood premiums are generally higher 8-9 vs. 4 days prior, so expecting to cover that 13% giveback).
 
  • Like
Reactions: Criscmt
the 4th attempt to breach 560 finally happened : low 545 at premarket

my IC is probably 530-610, to be decided this afternoon or tomorrow

this reinforces again my previous learnings... Mon/Tue is too early to tell range

I'd caution against the false positive of that data point. Once we broke through the late march double bottom at ~590 (technically on the 12th, but the 13th really sealed the deal), the early march double bottom at ~540 was the next logical level of support.

Thus, since ~midweek last week, a sensible short term -P strike has been around 540. What happened earlier this week has not changed that.