Wiki Selling TSLA Options - Be the House

[phantasms]

Is there any way to essentially use "stop losses" on covered calls?

For example, I'm ahead an average of 50% on my covered calls. Is there any way to make it that if the price rises up to just short of what I sold it for it will buy it back to close?

I'm currently of two minds.

1. Due to group think, I'm a little worried about a potential split announcement. That part of me says, just buy them all to close and take the great one day gain.
2. I realize that being nervous every week about a split announcement and leaving a ton on the table might be more costly than simply taking the loss when/and if a split announcement happens.

2a. My plan for if/when it happens is to add cash to my trading account and then simply buy them to close immediately at market open no matter how painful. Make sense?

 

[ChefBoyardee]

Trying out a new strategy - not sure if it has a name

Aug 20

+5 700 P
-5 690 P

-50 680 P
+50 670 P

The point is to reduce downside risk without adding much upside risk (iron condor would have more upside risk). If it drops below 685 I can close the debit spread for a profit and roll the credit spread out in time

Best case scenario is the window between 690 and 680 but I'm not counting on that

What are your thoughts on something like this?

 

[Drezil]

those 700/690 look to me like wasted money. Does this give you margin?
Or do you plan on managing them? Like close it on downturns, reopen on upswings?

I mean .. Max-Pain suggests a SP of 700-750 .. so those should end up OTM anyway ..

Or do you wanted to open 800/790 as protection?

 

[UltradoomY]

Trying out a new strategy - not sure if it has a name

Aug 20

+5 700 P
-5 690 P

+50 680 P
-50 670 P

The point is to reduce downside risk without adding much upside risk (iron condor would have more upside risk). If it drops below 685 I can close the debit spread for a profit and roll the credit spread out in time

Best case scenario is the window between 690 and 680 but I'm not counting on that

What are your thoughts on something like this?

View attachment 694286

Yes indeed - everything has a name!
I believe this is just a vertical bear put spread. - You believe the stock will be going down and are playing that but with a spread as to not over leverage.
Good luck - I am thinking opposite of you!
To the Moon!!

 

[alterac000]

With IV at 90 day ~0% anyone selling ICs this week?

 

[UltradoomY]

With IV at 90 day ~0% anyone selling ICs this week?

Waiting for tomorrow - pretty sure we see a nice FUD fest with China numbers coming out and Tesla shipping a massive amount to EU.
Closed today my BPS from Friday for 75% (was a $695/$595) and will wait for tomorrow and the drop.
I would be reluctant to sell IC's this week since max pain is $700 but this thing can land anywhere from $700-$750

 

[ChefBoyardee]

those 700/690 look to me like wasted money. Does this give you margin?
Or do you plan on managing them? Like close it on downturns, reopen on upswings?

I mean .. Max-Pain suggests a SP of 700-750 .. so those should end up OTM anyway ..

Or do you wanted to open 800/790 as protection?

Oops I mixed up the + and - on the 680/670 spreads

It's a debit spread, with 10x as many credit spreads further out of the money. And yeah the idea for management would be to close out the debit spreads if the stock drops, leaving just the bull put spreads

 

[phantasms]

Thank you all for the notes on selling the weeklies. I setup charts for my sold calls in ThinkorSwim and noticed the same thing that's been mentioned above.

As for my calls I bought back 80% of them at 60% profits. While I play it super safe with my strike prices I couldn't help but think leaving 40% on the table for now meant I didn't have to have this splitting worry [har har] for the rest of the week. Also, my initial goal of all this was to cover the payments on the difference between my sold 2018 AWD Model 3 and incoming P3. If the past month is a sign of anything I think I'll be able to cover Roadster payments! lol

I'll be driving from NH to NY to PA to crew my wife who's running a 100 mile race and wont have reception often.

I left one call on the table to make it interesting.

That said, if things blow up tomorrow or the next day I wont be able to resist selling a few here and there.

p.s. I've wasted a lot of time on forums and this is, by far, the best thread on the entirety of the internet. Thank you @adiggs and all the other contributors, human and dog alike.

p.p.s. This is the most times I've ever edited a post. I need more coffee.

 

[Cherry Wine]

Closed out 30x 1/21/22 $1000s for a nice $5.00




Since we're sharing, I managed to close out 30x 1/21/22 $1000 calls last week at a $5.05 per call profit (STO on 8/2 @ $27.00, BTC on 8/6 @ $21.95). I've decided I don't want to sell long-dated calls in front of AI Day at these levels so I wrote 30x 8/13 $775s @ $1.20 this morning. If we do rip higher this week to $750 or so I will probably re-open those long-dated calls.

On the other side, I STO 3x 8/13 $700 puts for a measly $6.40 each. I'm already riding 2x $815 puts that I foolishly STO back in February, which I've been rolling ever since, so I'm keeping my put exposure limited for the time being.

I closed my trades for this week before the close for a nice $2,500 profit on the day. Will look to reopen positions tomorrow on an anticipated move in response to July China numbers.

 

[adiggs]

It's been weird for me this last week and a half or so. I like to have both puts and calls open (which these days are BPS and lcc) so that I'm reasonably indifferent to the share price direction.

This last week and a half my theme is to sell into strength. So the shares are up today - sell the CC at that much better of a strike price. Shares were down on Friday - sell the BPS. That is really what I'm aiming to do. It is just also working out that the sell-into-strength notion is also corresponding to a good enough move that I'm taking off the other position, which leaves me either in puts or calls on any day. Tomorrow I'll wake up in calls - today I woke up in BPS.

Hopefully we'll have a morning push down by our friends the short sellers and I'll be able to take off the CC at a good price; then put the BPS back on and watch the shares finish up for the day! I'd call that wishful thinking except that happened once or twice last week!


I suspect that if I worked out to something more like 1.5-2.5 weeks from the .5-1.5 weeks I'm doing right now that I would end up more frequently having both positions at the same time again.

Something of an aside - I am also consciously trying to avoid Thu/Fri of expiration week, and probably Wed as well. The idea is to avoid those end of week wild gyrations that can happen in the option price. So if its Wed then I'm selling next week options; I'll still sell this week on Mon/Tue, but with a Wed or maybe Thu roll as a preference.

 

[ammulder]

I'll be driving from NH to NY to PA to crew my wife who's running a 100 mile race and wont have reception often.

If it’s Eastern States, good luck to her and May The Humidity Be With You!

 

[Buckminster]

I'll be driving from NH to NY to PA to crew my wife who's running a 100 mile race and wont have reception often.

That's a long distance - make sure you visit those SCs regularly and you should be fine.

 

[phantasms]

That's a long distance - make sure you visit those SCs regularly and you should be fine.

Totally fine. I’d happily drive across the country without planning in a Tesla. Only issue where I’m going is lack of chargers and that I need to drive in a 27 hour 103 mile circle while also camping in it, charging headlamps, etc. It’ll be fine though.

 

[CHGolferJim]

It was a good decision to delay any CC selling until late AM today. Watched the SP rise, plateau and start to possibly show signs of dipping --> pulled the trigger at ~11:20 at ~$722 SP (+$35, MaxPain $670) with sto against all IRA shares:

• 5% 081321C740 $14.80
• 30% 081321C740 $14.29
• 50% 081321C760 $7.62
• 15% 081321C780 $5.02
• avg. $9.44
• basically achieved total premium targeted at $30 higher strikes than Friday's close would have netted

Rationale:

• probable uptrend 1st half of month as the market digests spectacular ER, possible pause 2nd half of month
• book two weeks premium (just about reaching monthly target), spend rest of month rolling to protect shares and 8/2 premiums, tweaking for gains if possible
• complete the bulk of the month's trades (possibly completely exit CCs) before 8/19 AI Day, and the possible announcement of AGM/rumblings of another split
• "book 2 weeks early with moderately aggressive ladder and defend" may become the monthly approach as we move into the next 6-18 months updraft as $TSLA catalysts begin to materialize (Austin, Berlin, CyTruck, 4680, FSD, Semi, Roadster, Model 2/A)

Cleared the decks yesterday of the $740 and $760 at a cost of 16% of the premium, although it looks like there would have been plenty of time to do that today at slightly better prices. Expect the $780 to expire. In a bit of a quandary about next moves (since I only buy and sell calls) with all the upcoming events and possible spike up. However, over the past 2 months it has always paid to be aggressive and roll when needed, so it’s probably a matter of figuring out strike and date to STO. What I looked at yesterday was <$5 for 10 days and <$9 for 2 1/2 weeks which is pretty puny. Maybe make a move today or tomorrow and take what is available for logical targets. Can always roll up if there is a SP and price spurt.

 

[jeewee3000]

Slow day. Just to keep you guys in the loop these were my last trades:

1) on friday I BTO 720c @ 6,00 which I sold monday at the open for $10,50
2) I then immediately sold weekly cc's (during that same monday morning pop) : STO 755cc @2,70 and 800cc @ 0,53.
3) today I BTC all the cc's from step 2 for around 75% profit.

Normally I would've held those cc's 'till friday but all this talk about a possible split announcement is making me nervous. It would be painful if for example an 800-shitcall-cc sold for 0,53 each would go ITM and the stock goes berserk to $1000. I rather close now and wait for a better opportunity should the stock pop somewhere this week.

Now I'm tempted to BTO some calls since the stock is at the low end of the current trading range, but as this week could be really boring and flat I'll wait doing that 'till friday. If the stock stays low key until friday I'm definitely loading up on calls to play the AI-day-anticipation-pop surely to follow next monday.

GLTA

 

[Chenkers]

This should be an interesting week:
STO 100 x 670/695 750/755 IC @ $3.85
STO 90 x 665/690 750/775 IC @ $3.18

 

[KTC Lurker]

This thread has been immensely helpful as I've learned to trade options over the past 8-12 months. With the help of this group and a dear friend I started trading with TSLA options and learned that there is money to be made by augmenting my position, if you pay attention.

To me, options trading TSLA, even the simple selling of puts and calls, is a 3D matrix of options to offset risk and take profits. Sell on momentum (opening positions or rolling from put to call), stack timing strategies (weekly, monthly, quarterly) to capture IV, and sell/re-buy to maximize use of cash or margin.

While the above has made me LOTS of money, I've discovered a 4th dimension that I'm surprised I haven't seen discussed here. The lack of discussion may be because this is a TSLA forum, and if that's the only reason I apologize for where I'm about to take this. BUT, I've discovered a new level of optionality (rolling, rescuing, opposing momentum) by introducing a second ticker into my options strategy.

For me that ticker is SHOP, Shopify, a high growth e-commerce platform that is growing like TSLA but due to the nature of their SaaS business get much smoother recognition from the street for performance (or out-performance). The stock is low volume, high IV, massive premiums, and in a sector that has many beneficial and different traits to that of Tesla.

With the same margin (my weapon of choice) as a handful of Tesla puts I can sell 30-40% more SHOP puts at 2-3x the premium. I have a similar long term belief in Shopify's success as I do in Tesla; their anti-Amazon model that is powering massive businesses like Netflix (merch) but scales all the way down to the smallest mom & pop shop. Add in that my friends in the executive ranks at Amazon have admitted the company has no answer to Shopify and sees them as their biggest threat - and well I feel pretty good about the future of Shopify.

Whether you all decide to augment your TSLA strategy with SHOP or some other ticker is not important to me. I'm not here to pump SHOP. But I have gained so much value from this group that I wanted to share the insights I've discovered by expanding my matrix of options with another ticker. I can now roll a bad TSLA move into a SHOP play, rescue the value, and avoid wash sale rules to book losses if a non-macro catalyst causes a TSLA position to go deep ITM quickly. I'm sure I've only scratched the surface of the benefits, but my options matrix has gone orthogonal since this discovery.

The only downside I can find is that this strategy requires more time - time to research, time to track SHOP business leaders, time to read earnings, and time to stay on stop of stock price movements. That's time well spent for the >2x gains in options premium I've benefitted from since expanding my horizons.

Happy to discuss or hear opposing view points from this group.

 

[AquaY]

This thread has been immensely helpful as I've learned to trade options over the past 8-12 months. With the help of this group and a dear friend I started trading with TSLA options and learned that there is money to be made by augmenting my position, if you pay attention.

To me, options trading TSLA, even the simple selling of puts and calls, is a 3D matrix of options to offset risk and take profits. Sell on momentum (opening positions or rolling from put to call), stack timing strategies (weekly, monthly, quarterly) to capture IV, and sell/re-buy to maximize use of cash or margin.

While the above has made me LOTS of money, I've discovered a 4th dimension that I'm surprised I haven't seen discussed here. The lack of discussion may be because this is a TSLA forum, and if that's the only reason I apologize for where I'm about to take this. BUT, I've discovered a new level of optionality (rolling, rescuing, opposing momentum) by introducing a second ticker into my options strategy.

For me that ticker is SHOP, Shopify, a high growth e-commerce platform that is growing like TSLA but due to the nature of their SaaS business get much smoother recognition from the street for performance (or out-performance). The stock is low volume, high IV, massive premiums, and in a sector that has many beneficial and different traits to that of Tesla.

With the same margin (my weapon of choice) as a handful of Tesla puts I can sell 30-40% more SHOP puts at 2-3x the premium. I have a similar long term belief in Shopify's success as I do in Tesla; their anti-Amazon model that is powering massive businesses like Netflix (merch) but scales all the way down to the smallest mom & pop shop. Add in that my friends in the executive ranks at Amazon have admitted the company has no answer to Shopify and sees them as their biggest threat - and well I feel pretty good about the future of Shopify.

Whether you all decide to augment your TSLA strategy with SHOP or some other ticker is not important to me. I'm not here to pump SHOP. But I have gained so much value from this group that I wanted to share the insights I've discovered by expanding my matrix of options with another ticker. I can now roll a bad TSLA move into a SHOP play, rescue the value, and avoid wash sale rules to book losses if a non-macro catalyst causes a TSLA position to go deep ITM quickly. I'm sure I've only scratched the surface of the benefits, but my options matrix has gone orthogonal since this discovery.

The only downside I can find is that this strategy requires more time - time to research, time to track SHOP business leaders, time to read earnings, and time to stay on stop of stock price movements. That's time well spent for the >2x gains in options premium I've benefitted from since expanding my horizons.

Happy to discuss or hear opposing view points from this group.

Can you give a few examples of TSLA and SHOP Put trades you did as examples?

 

[Yoona]

This thread has been immensely helpful as I've learned to trade options over the past 8-12 months. With the help of this group and a dear friend I started trading with TSLA options and learned that there is money to be made by augmenting my position, if you pay attention.

To me, options trading TSLA, even the simple selling of puts and calls, is a 3D matrix of options to offset risk and take profits. Sell on momentum (opening positions or rolling from put to call), stack timing strategies (weekly, monthly, quarterly) to capture IV, and sell/re-buy to maximize use of cash or margin.

While the above has made me LOTS of money, I've discovered a 4th dimension that I'm surprised I haven't seen discussed here. The lack of discussion may be because this is a TSLA forum, and if that's the only reason I apologize for where I'm about to take this. BUT, I've discovered a new level of optionality (rolling, rescuing, opposing momentum) by introducing a second ticker into my options strategy.

For me that ticker is SHOP, Shopify, a high growth e-commerce platform that is growing like TSLA but due to the nature of their SaaS business get much smoother recognition from the street for performance (or out-performance). The stock is low volume, high IV, massive premiums, and in a sector that has many beneficial and different traits to that of Tesla.

With the same margin (my weapon of choice) as a handful of Tesla puts I can sell 30-40% more SHOP puts at 2-3x the premium. I have a similar long term belief in Shopify's success as I do in Tesla; their anti-Amazon model that is powering massive businesses like Netflix (merch) but scales all the way down to the smallest mom & pop shop. Add in that my friends in the executive ranks at Amazon have admitted the company has no answer to Shopify and sees them as their biggest threat - and well I feel pretty good about the future of Shopify.

Whether you all decide to augment your TSLA strategy with SHOP or some other ticker is not important to me. I'm not here to pump SHOP. But I have gained so much value from this group that I wanted to share the insights I've discovered by expanding my matrix of options with another ticker. I can now roll a bad TSLA move into a SHOP play, rescue the value, and avoid wash sale rules to book losses if a non-macro catalyst causes a TSLA position to go deep ITM quickly. I'm sure I've only scratched the surface of the benefits, but my options matrix has gone orthogonal since this discovery.

The only downside I can find is that this strategy requires more time - time to research, time to track SHOP business leaders, time to read earnings, and time to stay on stop of stock price movements. That's time well spent for the >2x gains in options premium I've benefitted from since expanding my horizons.

Happy to discuss or hear opposing view points from this group.

i was just thinking of this the last few days - diversify a portion of my acct from tsla, but on something that can give more or less same reasonable returns; pls give more details (sample trade) if you have time, thanks!

 

[KTC Lurker]

Can you give a few examples of TSLA and SHOP Put trades you did as examples?

Sure - last week I STO 1510 ($30 premium), 1515 ($25), 1520 ($30) SHOP puts expiring 8/13 - sold while the stock was dropping following an earnings beat (like TSLA). This morning, the stock popped $30 before being walked back down. I bought back a portion of my positions for 85% profit, but since I have time on my side and believe the stock will continue to climb out of the 1500's kept a few to close for pennies on Friday. This weekly put example nets premiums worth $28K (10 total contracts).

Also on last week's weakness I sold some high premium ~monthly puts - Aug 27 1500 ($60) and Sept 10 1550 ($100). These I expect to close w/ 90% profits in the next week or two as the stock makes its way back to the $1600's - these generated $52K in premiums for 6 contracts.

I haven't opened TSLA puts this week because of the relative margin use (IBKR margin req's are much higher for TSLA) and SHOP had the red momentum opportunity. If TSLA has a few red days then I'll take advantage of the momentum with TSLA.