Wiki Selling TSLA Options - Be the House

[BornToFly]

Assuming the stock price dips tomorrow and possibly Friday, followed by strengthening Monday and throughout next week, would it not be better to open the BPS side of the condor tomorrow, but wait on the BCS until Monday-ish (on the recovery side)?

Yes, if I had a crystal ball to know for sure. Will open up additional Condors anyway next week as I regain margin tied up in this weeks spreads, which will dollar cost average as the SP bounces around the next few days. Bird in the hand..., something, something.

 

[Yoona]

i will probably bring my IC to Friday; shorts are >10% away per side

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i may need to double up this position

what is wrong with me?
i am addicted to this thread
i am addicted to the options chain
i am addicted to my spreadsheets
i am addicted to probability analysis
i am addicted to maxpain
i am addicted to put walls and call walls
i am addicted to credit spreads (and now one guy is tempting me with his short straddles - you know who you are)

 

[dc_h]

If buttershrimp has the right call, and some dip looks likely, I will focus on opening a 10-29 bps tomorrow. I like the 710-660, but may go as high as 750-700 or 750-650. I'll wait until Monday or Tuesday to open a call spread. I think after an initial dip, we will have a steady rise again next week. Fundamentals are strong going into Q4 with affirmation of the 50% growth target and some production from Austin and Berlin. 50% would be 270,000+ cars in Q4, which could get us to 1200 to maintain a forward 100 PE.

 

[Knightshade]

FWIW they specifically called out they don't expect to deliver any cars from Austin or Berlin this year, though they expect to produce a few there before year-end.

 

[ReddyLeaf]

FWIW they specifically called out they don't expect to deliver any cars from Austin or Berlin this year, though they expect to produce a few there before year-end.

Similar to Shanghai. If they build cars and stockpile, but don’t sell until 2022, then the entire facility is listed differently in the accounting ledger (not that I think it makes any difference). Need @The Accountant to provide more clarification.

 

[bonk3125]

Closed all my BPS for the week right before market close. I'm thinking we get a decent dip tomorrow down to 830-840 range, maybe lower. If premium looks decent, I plan on reopening 745/795 for 10/22 for some pocket change. If not, then I'll look towards 10/29. Chart voodoo looks like enough support at 800 (mid-BB) but I'll probably play it safe with 750 strikes. I chickened out on BCS this week, but oh well.

I have some limit orders on plain share purchases (imagine that?) for my accounts that can't do spreads.

Now almost 10 weeks in, and I have made 70% return on the initial capital from sale of my model 3. At this rate, I'm wondering if I'll be fully funding my Y upgrade by the time it's ready.

Sadly if you do, it would guarantee you have enough time to earn the cost of the car before it’s delivered — and not because of how quickly you can make money trading options. (New orders estimated to deliver in May-June!!)

Heh not too sad. Maybe I can get both!

I should've listened to you. Now I'll definitely have plenty of time. Est. delivery September. Earnings great. Fundamentals rock solid. Outlook best it's ever been. Slow and steady wins the race. These parabolic runs are pretty fun though.

 

[bonk3125]

FWIW they specifically called out they don't expect to deliver any cars from Austin or Berlin this year, though they expect to produce a few there before year-end.

My December Y delivery got bumped to January. Maybe it'll be one of the stockpiled Texas produced cars.

 

[Knightshade]

My December Y delivery got bumped to January. Maybe it'll be one of the stockpiled Texas produced cars.

You've got an extra twist in your story, your sig says you're in Texas.

Tesla can't actually sell you a car in Texas, legally.


There's been considerable debate on how this will be handled.

One option is they keep selling CA cars to folks in Texas and then ship em in.

Other option is they have to set up an out-of-state holding lot just over the TX state line- then ship from Austin to the lot, do the "technically sell the car to someone living in TX" part while it's there, then ship it back in to be picked up by the owner who "bought it out of state"

 

[The Accountant]

Similar to Shanghai. If they build cars and stockpile, but don’t sell until 2022, then the entire facility is listed differently in the accounting ledger (not that I think it makes any difference). Need @The Accountant to provide more clarification.

Yes - cars produced in Berlin and Austin in 2021 will have high cost and thus lower margins.
But once they are produced, the cost sits on the Balance Sheet as an asset (Inventory) and do not hit the Income Statement until sold.
So if they build in 2021 and sell in 2022, the low margins hit 2022.

We might see the margins as follows in December:
Shanghai/Fremont - Selling Price $55k, Cost $40k and Profit $15K
Berlin/Austin - Selling Price $55k, Cost $54k and Profit $1K

The low $1K profit does not hit Q4 if the sale is pushed to Q1 2022,

 

[bonk3125]

You've got an extra twist in your story, your sig says you're in Texas.

Tesla can't actually sell you a car in Texas, legally.


There's been considerable debate on how this will be handled.

One option is they keep selling CA cars to folks in Texas and then ship em in.

Other option is they have to set up an out-of-state holding lot just over the TX state line- then ship from Austin to the lot, do the "technically sell the car to someone living in TX" part while it's there, then ship it back in to be picked up by the owner who "bought it out of state"

Yes, I read through those posts some weeks (months?) back. Curious to see how they'll handle it. I'm sure Tesla's got a plan.

 

[Knightshade]

Yes - cars produced in Berlin and Austin in 2021 will have high cost and thus lower margins.
But once they are produced, the cost sits on the Balance Sheet as an asset (Inventory) and do not hit the Income Statement until sold.
So if they build in 2021 and sell in 2022, the low margins hit 2022.

We might see the margins as follows in December:
Shanghai/Fremont - Selling Price $55k, Cost $40k and Profit $15K
Berlin/Austin - Selling Price $55k, Cost $54k and Profit $1K

The low $1K profit does not hit Q4 if the sale is pushed to Q1 2022,

Good time to start using the valuation allowance maybe in Q1/Q2 to offset the impact a bit?

Not like Tesla can say with a straight face after this year they're not "more likely than not" to remain profitable.

 

[M3Rider]

Felt pretty safe holding my bps through earnings. Only closed 990/1000cc at 50% just in case, although I felt 90% chance it was unnecessary.

 

[FS_FRA]

Pondering a setup for 10/29.....put premiums pretty shitty. Will continue to ponder, waiting to see a clear direction. I believe we should be hitting 900 next week, but I'm not sure if they feel the same way...

 

[tradenewbie]

Didn't open my 35 X -1000/+1100 BCS at $1 (got too greedy and set it as $1.5) on Tue, then set it at 0.7 on Wed but couldn't get it, then 0.5 yesterday and couldn't get it, so eventually didn't have any BCS this week......what a shame...

Not sure if it still make sense to set a BCS today and set it a much lower strike (eg. -950/+1050) to get it filled?

 

[jeewee3000]

Pondering a setup for 10/29.....put premiums pretty shitty. Will continue to ponder, waiting to see a clear direction. I believe we should be hitting 900 next week, but I'm not sure if they feel the same way...

I'm in the same boat. Will probably sell BPS at decent distance, not geting greedy this week.

 

[tradenewbie]

For IV crush (if we have today), usually would it be within the first few seconds, first minute, or at least have few minutes before IV start to crush?
(because I am thinking to do a BCS -950/+1050 asap before IV crush)

 

[jeewee3000]

For IV crush (if we have today), usually would it be within the first few seconds, first minute, or at least have few minutes before IV start to crush?
(because I am thinking to do a BCS -950/+1050 asap before IV crush)

Most IV crush will be instantaneous upon open, given the fact that the uncertainty of earnings is gone. Translation: we know the stock (probably) won't move 10% this week.

If there is IV crush and sustained drop today and tomorrow it might be a good move to buy calls tomorrow evening, with the intention of selling them within the next couple of weeks.

I won't do this however. That strategy has burned me too many times in the past. Most sure fire way to pull it off is to invest in long dated options (+6months), not too far OTM (max $900), but I'll just use the capital required for that to sell BPS against.

Not advice, just my way of thinking nowadays.

 

[tradenewbie]

Most IV crush will be instantaneous upon open, given the fact that the uncertainty of earnings is gone. Translation: we know the stock (probably) won't move 10% this week.

If there is IV crush and sustained drop today and tomorrow it might be a good move to buy calls tomorrow evening, with the intention of selling them within the next couple of weeks.

I won't do this however. That strategy has burned me too many times in the past. Most sure fire way to pull it off is to invest in long dated options (+6months), not too far OTM (max $900), but I'll just use the capital required for that to sell BPS against.

Not advice, just my way of thinking nowadays.

Thanks, so it would make no sense for me to do a BCS immediately at open for expiry this week since the IV will crush immediately

 

[FS_FRA]

Evergrande has until Saturday 10/23 to avoid bankruptcy. Assuming they don’t manage to wiggle their way out again, how do you guys see the systemic risk - if any - and macros impact on TSLA going into next week?

 

[Right_Said_Fred]

Putting my moderator cap on: let's not post too much general stuff (Evergrande, Texas sales ban, Berlin/Austin production) in this thread. This is where option trading/strategies are being discussed. For general subjects we have the main thread.