Wiki Selling TSLA Options - Be the House

[Yoona]

my 7-leg Iron Condor:

a little bit skewed off-center towards -p720 but not panicking yet

 

[PastorDave]

I look forward to viewing this video a little later;
Do you have any recommended videos to help newbies walk through your LEAPS strategy?

Nope, sorry. Came up with that not-advice on my own and I'm not making videos of my trading strategies yet, lol. I started this out by buying maybe 50 deep (600s when the SP was about 650), but that's a little risky, as the SP falling below your strike will mean you need to use margin to sell calls against these. Better to buy calls that are 100 to 150 deep and about 2 months out, then set limit orders to roll when the new weekly becomes available. If that price isn't attractive, or you want less work, you can just roll a month at a time for ~$8. You don't want to wait too long to roll, as the price will go up to more like $3 a week closer to expiration. Glad to answer any questions though.

 

[buttershrimp]

Nope, sorry. Came up with that not-advice on my own and I'm not making videos of my trading strategies yet, lol.

Is this your way of asking me to subscribe and hit the like button?

 

[CrunchyJello]

Nope, sorry. Came up with that not-advice on my own and I'm not making videos of my trading strategies yet, lol. I started this out by buying maybe 50 deep (600s when the SP was about 650), but that's a little risky, as the SP falling below your strike will mean you need to use margin to sell calls against these. Better to buy calls that are 100 to 150 deep and about 2 months out, then set limit orders to roll when the new weekly becomes available. If that price isn't attractive, or you want less work, you can just roll a month at a time for ~$8. You don't want to wait too long to roll, as the price will go up to more like $3 a week closer to expiration. Glad to answer any questions though.Thanks, but nothing yet.

Thanks , but nothing yet.
More for my understanding, and not practicing;
my account is way too small for it.
Always nice to learn though!

 

[vwman111]

Nope, sorry. Came up with that not-advice on my own and I'm not making videos of my trading strategies yet, lol. I started this out by buying maybe 50 deep (600s when the SP was about 650), but that's a little risky, as the SP falling below your strike will mean you need to use margin to sell calls against these. Better to buy calls that are 100 to 150 deep and about 2 months out, then set limit orders to roll when the new weekly becomes available. If that price isn't attractive, or you want less work, you can just roll a month at a time for ~$8. You don't want to wait too long to roll, as the price will go up to more like $3 a week closer to expiration. Glad to answer any questions though.

As a Pastor, how do you have time for all of this trading?

 

[PastorDave]

As a Pastor, how do you have time for all of this trading?

I'm an ordained minister, but I work in a denominational governing body (from home), not a church. I've also got a small business, so I'm a busy guy, but I've got people helping me do my job. That's why I'm not active on the forum during the day much though.

 

[AxlxA]

TSLA BPS thought experiment

Is this one of you guys?

This guy obviously not seeing the bid ask spread on his plan and won't likely get fills.

The comments are bearish

 

[samppa]

my 7-leg Iron Condor:

View attachment 712573

a little bit skewed off-center towards -p720 but not panicking yet
View attachment 712574

Interesting. What's your plan on managing this if needed to?
Looks a bit of a nightmare to manage so many strikes..

 

[corduroy]

Has anyone tried the "Zebra strategy" (aka a back ratio spread) for leaps?

Setup:

Buy 2 ITM .70 delta leap calls
Sell 1 ATM .50 delta leap call (same expiration)

Main benefits:

You end up essentially paying no extrinsic value for the LEAP, so lower break even.
The net position is .90 delta
Should be tradable in an IRA

Here's a very comprehensive article about the strategy.

 

[Yoona]

Interesting. What's your plan on managing this if needed to?
Looks a bit of a nightmare to manage so many strikes..

before -p720 goes itm, roll BPS into different weeks but cash out the calls first 1) to prevent initial doubling of margin usage and 2) to stay away from the sp rise the next few weeks

 

[Knightshade]

Has anyone tried the "Zebra strategy" (aka a back ratio spread) for leaps?

Setup:

Buy 2 ITM .70 delta leap calls
Sell 1 ATM .50 delta leap call (same expiration)

Main benefits:

You end up essentially paying no extrinsic value for the LEAP, so lower break even.
The net position is .90 delta
Should be tradable in an IRA

Here's a very comprehensive article about the strategy.

The article seems to suggest long DTE isn't great for this strategy?

There is probably no need to put on ZEBRA with greater than 90 DTEs. The further out you go, the greater the exposure to volatility changes, which are difficult to predict.

The further out you go, the larger the vega and the more capital is required as well.

 

[CHGolferJim]

I (apparently foolishly) bought some hammered 100121C800 on Monday at $1.69 (-60% from Fri close) looking for a pop — which didn’t happen at that strike, it did at ITM C650 btw = a learning. I can’t think of anything constructive to do with these besides takes the loss before they decline further. [20th close $1.52 and 21st $0.86.].

Any ideas? Is there much of a chance of recovery by next week if SP moves to $760+?

 

[CHGolferJim]

I guess everyone interested noticed that 9/24 Max Pain dropped to $735 today from $745 yesterday.

 

[TheTalkingMule]

I think we're out of the "max pain rules everything" doldrums of summer. Volume is increasing. SP is pretty much where it was before a blowout 1Q deliveries report. If things stay flat 4 moreonths, our PE ratio hits ~120....with 100% growth.

I get the feeling "the system" has just kept TSLA flat through all this good news so the big boys can position themselves for what they knew would be blowout 3Q & 4Q earnings.

I bring this up as an optimists warning in relation to selling CC's. Be careful from here til February!

 

[Discoducky]

I think we're out of the "max pain rules everything" doldrums of summer. Volume is increasing. SP is pretty much where it was before a blowout 1Q deliveries report. If things stay flat 4 moreonths, our PE ratio hits ~120....with 100% growth.

I get the feeling "the system" has just kept TSLA flat through all this good news so the big boys can position themselves for what they knew would be blowout 3Q & 4Q earnings.

I bring this up as an optimists warning in relation to selling CC's. Be careful from here til February!

I agree completely and totally...starting next week! **IF** the button is enabled and the 7 day insurance 'good driver' behavior clock starts ticking. But regardless, we'll start to get rumblings of how gigantic Q3 and September has been for China production, which should kick off some heavy buying from retail investors.

 

[stealthyc]

I think we're out of the "max pain rules everything" doldrums of summer. Volume is increasing. SP is pretty much where it was before a blowout 1Q deliveries report. If things stay flat 4 moreonths, our PE ratio hits ~120....with 100% growth.

I get the feeling "the system" has just kept TSLA flat through all this good news so the big boys can position themselves for what they knew would be blowout 3Q & 4Q earnings.

I bring this up as an optimists warning in relation to selling CC's. Be careful from here til February!

Max pain didn't rule everything during the summer either, it's a narrative that doesn't hold up when the data is examined.

 

[TheTalkingMule]

Max pain didn't rule everything during the summer either, it's a narrative that doesn't hold up when the data is examined.

"Everything" is perhaps a strong word. Mire accurately I would say volume was so low that MM's were in complete control from mid-April til the week after Labor Day. I mean, it's been nothing but two astonishing quarters and the SP was floating around at 30% off the ATH.

I find it hard to believe that was anything other than those well positioned to move the SP pushing it down.

I don't think FSD will have any positive impact on SP until we see a fleet of robitaxis and Tesla is licensing FSD to BMW. I think shocking revenue, growth, and earnings will move the needle up beyond $1000 by the time 4Q earnings is out and processed by the algos.

Wall Street has no imagination whatsoever, thinking they'll grasp the implications of FSD is giving them too much credit.

 

[Knightshade]

Also just a "chart with deceptive scale only comparing friday close with official MP" doesn't tell the whole story.

We've seen lots of weeks where MP was weird because of way OTM options, but there was a fairly obvious "realistic" target for the MMs, and it'd frequently close within pennies of it.

 

[ammulder]

FSD could move the needle if the beta release leads to improved uptake in either the pay-up-front or subscription numbers. Also if Tesla moves on to training and testing the beta in other regions with currently lower uptake. I think people spending more on Tesla software would definitely get Wall Street's attention (even if indirectly via increased margins).

 

[bkp_duke]

I think we're out of the "max pain rules everything" doldrums of summer. Volume is increasing. SP is pretty much where it was before a blowout 1Q deliveries report. If things stay flat 4 moreonths, our PE ratio hits ~120....with 100% growth.

I get the feeling "the system" has just kept TSLA flat through all this good news so the big boys can position themselves for what they knew would be blowout 3Q & 4Q earnings.

I bring this up as an optimists warning in relation to selling CC's. Be careful from here til February!

Max pain is a much better indicator when Call volumes are high. What we are seeing are high Put volumes the past few weeks, and MMs apparently have no problem accumulating shares "on the cheap".

Also, historically, someone posted in the last week or so in this thread that historically for at least the past year, TSLA has been trending a few bucks ($5 - 10?) above the max pain line for Friday closes.