Wiki Selling TSLA Options - Be the House

[dc_h]

I continue to be surprised by the aggressive call sells here. P&D could be 10% above street estimates and earnings 20% above street estimates. Often the beats are overwhelmed by manipulation, but eventually the market is a system of weights and measure, even if short term it is a popularity contest. I did sell a small call spread at 850-900, maybe too conservative, but the catalysts are huge. P&D, earnings beat, FSD becoming real, Shanghai production on track for growth, Austin, Berlin coming online and look out if Elon announces a new car from developed in China due in 2022. I imagine there is strong market maker activity to keep us below 800 today, but if buying pressure continues this week, we could easily be pushing 850 by Friday. IV will also rise going into P&D and the stockholders call on the 7th. With the long term IV decline over the last 6 months, it seems like a lot of opportunity to start a fight for ATH by earnings on October 27th and then a new base through the end of the year, before another breakout. Q1 is always tough, so now through January earnings could be the high for the 1st half of 2022.

 

[dl003]

I continue to be surprised by the aggressive call sells here.

 

[Discoducky]

I'd like to make some options money between now and earnings, but I feel like I've learned my lesson playing with compressed springs and getting hit in the face. Is ATH in the cards for this week? I just don't see how this spring isn't compressed more than that as I thought Q1 and Q2 were going to unleash retail buying.

 

[Drezil]

I still fear & hope for a reversal tomorrow down to 770 or so ..

I mean .. i sold my 700c @102 for 40%(?) profit.. and i am looking to reenter tomorrow on a dip..
Basically gave up half of my whole position to not have a -88k day again (like last week .. -.-).

Bot otherwise: good day today.
I now only have a portfolio-δ of ~1000, θ of ~800, Λ of ~2900. (why is vega shorted with big lambda?!)

 

[jeewee3000]

I continue to be surprised by the aggressive call sells here. P&D could be 10% above street estimates and earnings 20% above street estimates. Often the beats are overwhelmed by manipulation, but eventually the market is a system of weights and measure, even if short term it is a popularity contest. I did sell a small call spread at 850-900, maybe too conservative, but the catalysts are huge. P&D, earnings beat, FSD becoming real, Shanghai production on track for growth, Austin, Berlin coming online and look out if Elon announces a new car from developed in China due in 2022. I imagine there is strong market maker activity to keep us below 800 today, but if buying pressure continues this week, we could easily be pushing 850 by Friday. IV will also rise going into P&D and the stockholders call on the 7th. With the long term IV decline over the last 6 months, it seems like a lot of opportunity to start a fight for ATH by earnings on October 27th and then a new base through the end of the year, before another breakout. Q1 is always tough, so now through January earnings could be the high for the 1st half of 2022.

I understand your reasoning, but we've seen a huge disconnect between price action and upcoming/possible catalysts many times before. I think we've gotten slightly numb to it.

As for me, the little calls I sold for 800 this week are perfectly manageable by splitting them up into more calls at a higher strike, and /or rolling them out. I'm still going to wait a bit to see the options activity in the coming days and the SP action. If 800 is never crossed in the coming days we could stabilize back around 780.

Time will tell.

I did have to resist to not double down by selling more calls and increasing my average selling price, but that would leave me more vulnerable in case we do keep the rally going. Decisions, decisions...

TL;DR: I agree with your call for prudence, but we're degenerates I guess.

 

[Cherry Wine]

I continue to be surprised by the aggressive call sells here. P&D could be 10% above street estimates and earnings 20% above street estimates. Often the beats are overwhelmed by manipulation, but eventually the market is a system of weights and measure, even if short term it is a popularity contest. I did sell a small call spread at 850-900, maybe too conservative, but the catalysts are huge. P&D, earnings beat, FSD becoming real, Shanghai production on track for growth, Austin, Berlin coming online and look out if Elon announces a new car from developed in China due in 2022. I imagine there is strong market maker activity to keep us below 800 today, but if buying pressure continues this week, we could easily be pushing 850 by Friday. IV will also rise going into P&D and the stockholders call on the 7th. With the long term IV decline over the last 6 months, it seems like a lot of opportunity to start a fight for ATH by earnings on October 27th and then a new base through the end of the year, before another breakout. Q1 is always tough, so now through January earnings could be the high for the 1st half of 2022.

There are a couple of noteworthy resistance levels between here and $850; I would be surprised if we breach it on optimism alone by this Friday and think that we'll need some fundamentals to move higher than that. Next Friday, on the back of a blowout P&D report? Yeah, I could see that.

 

[BornToFly]

Looks like this is only the 5th time we have breached the upper BB this year. Will it climb for a while like the breach in January, or quickly level out like the other 3? I'm hoping for a January repeat....

 

[InTheShadows]

I don’t have any sold calls. My put spreads had very little movement today because of IV going up. I did notice that my DITM LEAPS seem to have finally gotten the word that the share price is on the rise.

I won’t be selling calls until things seem to stabilize for two weeks, which might be a while. I have also decided to keep myself In Check from getting too aggressive following the share price up with puts. I’m going to keep the short leg within one strike of the 50 day SMA. Following a stock up too closely with short puts can get ugly when there is a sharp reversal because of IV liking to spike more on pull backs than runs.

 

[Cherry Wine]

Looks like this is only the 5th time we have breached the upper BB this year. Will it climb for a while like the breach in January, or quickly level out like the other 3? I'm hoping for a January repeat....

I looked back at that as well, but January (and November before it) were such an anomaly. I think it would take a similar catalyst to repeat.

 

[BornToFly]

I looked back at that as well, but January (and November before it) were such an anomaly. I think it would take a similar catalyst to repeat.

The catalyst could be amazing Q3 numbers and earnings.

 

[buttershrimp]

sold 50x 650/710 on $4 friday... then increased count to 80x when I rolled up to 680/740 today for another $2.5..... then sold 820/880 BCS for $4....

Will see how it plays out

 

[ReddyLeaf]

Looks like this is only the 5th time we have breached the upper BB this year. Will it climb for a while like the breach in January, or quickly level out like the other 3? I'm hoping for a January repeat....

A cursory look suggests maybe those were good times to sell short term covered calls. It doesn’t feel like that now with all the positive news coming out. I’m expecting a continuing SP rise, which unfortunately I’m on the wrong side of. I got faked out by last Monday’s drop and MaxPain telegraphing <750 last week. I wasn’t expecting the SP rise to start until TODAY. Now I’m stuck rolling calls for pennies in front of that #$@&&#&**$$ steamroller.

 

[Chenkers]

I am surprised how conservative you are being with the CC's. What do you think the SP will be at the end of the week?

Covered Calls represent less than 2% of my weekly premium so I look at them as icing on top and don't try to get too aggressive. I still think under $820 is likely but I'd be more comfortable with $830+. If last week's trading pattern gets repeated then it could really climb but I still think they'll try to keep a lid on it until P&D come out.

 

[Chenkers]

You're a brave soul. In the OptionTrader while putting a multi-leg (BPS) together the lack of maintenance margin impact insight boggles my mind. Do you have a formula for calculating manually that you use?

I don't use Option Trader. I just open the option chain, turn on strategy builder and use it to build an IC, vertical or whatever I want. When I have it configured with a price selected, I click the + next to advanced, then show margin impact to get the initial and maintenance margin, commissions etc. This also allows you to open the performance profile to look at the risk/return etc before submitting the order.

 

[Discoducky]

$825 is the next line of resistance!

 

[Discoducky]

As a side note, I will be formally retired at the end of the month. Will be transitioning to full time options trading. My wheel is very skewed towards daring the stock to hit 1k as an FYI.

 

[KTC Lurker]

As a side note, I will be formally retired at the end of the month. Will be transitioning to full time options trading. My wheel is very skewed towards daring the stock to hit 1k as an FYI.

Congrats! Living the dream.

 

[KTC Lurker]

I don't use Option Trader. I just open the option chain, turn on strategy builder and use it to build an IC, vertical or whatever I want. When I have it configured with a price selected, I click the + next to advanced, then show margin impact to get the initial and maintenance margin, commissions etc. This also allows you to open the performance profile to look at the risk/return etc before submitting the order.

I see, thanks. Have a favorite roll up/down/out methodology? Trying to learn 80/20 of this new interface as quickly as possible.

 

[Chenkers]

I see, thanks. Have a favorite roll up/down/out methodology? Trying to learn 80/20 of this new interface as quickly as possible.

On the portfolio screen, right click on the option and it will give a link to roll the option. This opens the normal roll window where you can select dates and strikes and review margin/premium impact. If rolling a multi-leg option, click the + sign next to it and it will allow you to roll one leg or Put/Call legs in the case of an IC. You can also use Ctrl/left click then right click to select multiple options to roll or close as a strategy.

 

[PastorDave]

After getting squashed last week, I closed out basically all of my options other than long calls this morning. Closed my spreads and lccs for about a 10k net gain and freed up a ton of margin and cash. Then I opened some more conservative put spreads (for me):
STO 10/1 650/750 @ $7.65
STO 10/1 710/730 @ $1.77
STO 10/8 710/730 @ $2.40
STO 10/15 710/730 @ $3.02

I also added to my 12/17 700s @ $111

After that I got a little frisky and decided to open some ITM (and some ATM on the way up) put spreads:
STO 10/1 780/800 @ $8.55
STO 10/1 775/795 @ $5.11
STO 10/8 750/770 @ $5.42
STO 10/15 780/800 @ $10.20

Finally, I hedged a little with a small lcc position:
STO 10/1 800c @ $9.32

I've got a lot more margin available than usual, because I do not have a good read on what the stock is going to do this week. If there's a dip back under the upper BB, I'll sell some more put spreads and probably add to my long calls as well. I am going to pause my foray into IC land until we're well past earnings and other catalysts and go back to the higher risk higher reward spreads that had been working for me. If I screw up on a 20 wide spread I'm getting $10 for, that's a whole lot less painful than $2 on a 20 wide.

Busy day, as I picked up my first actual Tesla today; a used M3. My plan is to drive that while I stand in line for a Model S; I was going to order one last month but I waited too long and the wait times are now more than I can deal with. I've been investing in TSLA since 2014, and went all in during the COVID crash, but I've never actually driven one until today, lol. Have to say the pick up is dangerously fun!