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Wiki Selling TSLA Options - Be the House

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NOT-ADVICE

When rolling for time I like to bias heavily towards max strike improvement subject to a net credit. The way I think about it - I am taking a week (or 4, or whatever) from earning income in order to maximize my likelihood of 'rescuing' the position. It can easily mean that I miss out on a week or more of income generation, but at 1-3%/week, even 26 weeks of the year earning income is .. uhmm .. kind of awesome.
How do you go about rolling positions in your IRA? Every time I try it gives me an error abou leaving a large naked position.

Second question, for all those with experience in rolling positions - I cannot seem to find positions that allow me to roll either for a credit or to improve my strikes. for example I currently have -p1060/+p960 for Nov 12. What would be the possible roll for those to improve strikes without debit?
 
How do you go about rolling positions in your IRA? Every time I try it gives me an error abou leaving a large naked position.

Second question, for all those with experience in rolling positions - I cannot seem to find positions that allow me to roll either for a credit or to improve my strikes. for example I currently have -p1060/+p960 for Nov 12. What would be the possible roll for those to improve strikes without debit?
For the ira, how many legs can you do on a trade? Do you have enough free cash to cover one more put?

For the roll, Nov 26 1050/950 looks about even at $43 as does Dec 10, 1040/940
 
How do you go about rolling positions in your IRA? Every time I try it gives me an error abou leaving a large naked position.
Are you putting it as a roll transaction with all 4 transactions in one ticket? (Like what is below.)

Second question, for all those with experience in rolling positions - I cannot seem to find positions that allow me to roll either for a credit or to improve my strikes. for example I currently have -p1060/+p960 for Nov 12. What would be the possible roll for those to improve strikes without debit?
That is far enough in the money that you can only roll for more time with a small credit:
1636496138375.png
 
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Reactions: adiggs
I have 20 11\19 BPS from 920 to 780 in 3 different positions. All 100 point spreads. I moved 10 Nov 12, 950-850 to Nov 19 880-780 for a 1.20 credit. if we go lower tomorrow, I'll move things out another week while IV is high and shift everything down as much as possible. Looks like moving out from 11-19 to 11-26 is not as easy, I couldn't move down more than 20 to 30 dollars without paying to move. Q4 numbers are going to be amazing, but fundamentals take a back seat at this point in the quarter to momentum and market makers. I missed out on huge premiums for Nov 12 1450 calls last week, sold covered calls and 1300-1400 call spreads at the open today.
Next big news could be if Elon has sold yet, or is still selling. If he's done, there should be a nice bounce to hurt everyone with open BCS. Otherwise, momentum down to keep hitting the BPS. Smart (wise) move @adiggs just take the week off.
 
Second question, for all those with experience in rolling positions - I cannot seem to find positions that allow me to roll either for a credit or to improve my strikes. for example I currently have -p1060/+p960 for Nov 12. What would be the possible roll for those to improve strikes without debit?
When rolling ITM spreads I try to achieve a credit or at least break even on the roll. It's often difficult to do this with the existing strikes so there are some other options you can consider. One I use commonly is to widen the spread between strikes enough to get a small credit on the roll. For example with your 1060/960 you may have to go to a 1070/960 to get a credit on the roll. This will obviously take a bit longer to get back ITM but imo is better than realising a partial loss with a debit roll. The thing to watch with this is your margin buffer as widening the spread will reduce the margin improvement from the roll. If you're tight on excess margin liquidity then this can become a limiting factor to future rolls. A similar approach to this is to slightly increase the number of BPS you are rolling into (but less preferable imo).

The other things to consider are to use other option sales to help achieve an overall credit roll even if the BPS roll itself is a debit. For example having ITM BPS gives you more freedom to sell a BCS for extra premium as a worsening BCS improves your ITM BPS. I'm quite happy to sell extra CC or BCS (which generally improve my margin buffer) if it means I can achieve a better roll with the BPS. A similar option to consider is effectively dividing the roll into an IC by rolling a partial number of the BPS to a new expiry BPS and the rest of the value being replaced with a number of BCS.

The other important factor to consider with rolling BPS is not to wait until late in the week to do it. The P+ side of the BPS will start to lose more relative value later in the week and that makes rolling for credit even harder.

Overall as long as you maintain a healthy margin balance (or cash backing) there should be no impediment to rolling out semi-indefinitely. I'm comfortable rolling as much as necessary given the overall prospects for TSLA rising again.
 
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How do you go about rolling positions in your IRA? Every time I try it gives me an error abou leaving a large naked position.

Second question, for all those with experience in rolling positions - I cannot seem to find positions that allow me to roll either for a credit or to improve my strikes. for example I currently have -p1060/+p960 for Nov 12. What would be the possible roll for those to improve strikes without debit?
If you had a $200 spread (1060/860) you would be able to roll for credit or improved strike. That is why wider is better. The SP has fallen too far into your spread width. Of course, a $50 spread of 1060/1010 would be much worse off.
 
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Sold almost all shares at...the bottom. Both in retirement, then my brokerage.

My OTM BPS became ITM....I'm embarrassed to say that I initially took the suggestions of the veterans here and was OTM @960/810 last week and decided to roll them up into the 1100s Friday. I woke up and saw my account drop 50% in half an hour and was pouring sweat. I panic-rolled and closed a lot and took heavy losses and lost about 40% of my account today.

In some ways, it hurts, but then I look back to where I was a year ago. I got back in after COVID at 200 and rode it all the way here to 1,000. I got greedy and sold too close to the sun using margin.

In some instances like today, as my portfolio drops my relationships blossom. My heart opened up to my girlfriend to tell them everything. I'd been hiding my portfolio value for years from my girlfriend. It had actually caused a chasm within us as she sensed I had a barrier within us. So I finally let her know what I'd done.

Lo and behold, she has been very understanding, supportive, and... still loves me?! She really is a keeper and I'll have to lock her in before she comes to her senses.

My father has also been supportive:
Father: "When I went all-in on options in 2000 and 2008, I saw my portfolio go from $3mil to 100k."
Me:"Wow, so that's why you were so grouchy!"

Suppose my saving grace is that with these massive losses, I'm glad to have learned a very expensive lesson. I feel that I'll be in cash for a while as I fix these BPS situations. Figure at a rate of 1.5% weekly gain, I'll make my portfolio back eventually.

These are my positions and am wondering if anyone has any suggestions. Thank you!

11/12:
3 x 1110/1080
4x 1125/1100

11/19:
4x 1080/1050
20x 1120/1095

5X 1135/1125
7X 1130/1090

33% Of my portfolio currently.
 
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Sold almost all shares at...the bottom. Both in retirement, then my brokerage.

My OTM BPS became ITM....I'm embarrassed to say that I initially took the suggestions of the veterans here and was OTM @960/810 last week and decided to roll them up into the 1100s Friday. I woke up and saw my account drop 50% in half an hour and was pouring sweat. I panic-rolled and closed a lot and took heavy losses and lost about 40% of my account today.

In some ways, it hurts, but then I look back to where I was a year ago. I got back in after COVID at 200 and rode it all the way here to 1,000. I got greedy and sold too close to the sun using margin.

In some instances like today, as my portfolio drops my relationships blossom. My heart opened up to my girlfriend to tell them everything. I'd been hiding my portfolio value for years from my girlfriend. It had actually caused a chasm within us as she sensed I had a barrier within us. So I finally let her know what I'd done.

Lo and behold, she has been very understanding, supportive, and... still loves me?! She really is a keeper and I'll have to lock her in before she comes to her senses.

My father has also been supportive:
Father: "When I went all-in on options in 2000 and 2008, I saw my portfolio go from $3mil to 100k."
Me:"Wow, so that's why you were so grouchy!"

Suppose my saving grace is that with these massive losses, I'm glad to have learned a very expensive lesson. I feel that I'll be in cash for a while as I fix these BPS situations. Figure at a rate of 1.5% weekly gain, I'll make my portfolio back eventually.

These are my positions and am wondering if anyone has any suggestions. Thank you!

11/12:
3 x 1110/1080
4x 1125/1100

11/19:
4x 1080/1050
20x 1120/1095

5X 1135/1125
7X 1130/1090
Sorry for your losses. It’s tough to provide suggestions without knowing what % of your max loss is your actual portfolio.

The best option might be to sell cash covered puts with your cash-BPS max loss , don’t use margin.

Spreads can be dangerous so it’s best to be conservative with your strikes.
 
adiggs mentioned that this big move is akin to the S&P 500 front-running, and I agree. We don't know when Elon will sell his shares, nor how. We (and the shorts) only know that it's coming. So there's less incentive for people/funds to buy the dip, therefore no support to counter the games the shorts are obviously playing.

With only 58 million shares traded, I don't think Elon has sold any shares yet. :(
 
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Reactions: adiggs
Sorry for your losses. It’s tough to provide suggestions without knowing what % of your max loss is your actual portfolio.

The best option might be to sell cash covered puts with your cash-BPS max loss , don’t use margin.

Spreads can be dangerous so it’s best to be conservative with your strikes.
Thank you. I appreciate the support. In some ways, I'm making amends with the max loss aspect and doing cash-covered puts. I guess I'm learning the hard way and earned a stripe in this game.

It is about 33%
 
Sold almost all shares at...the bottom. Both in retirement, then my brokerage.

My OTM BPS became ITM....I'm embarrassed to say that I initially took the suggestions of the veterans here and was OTM @960/810 last week and decided to roll them up into the 1100s Friday. I woke up and saw my account drop 50% in half an hour and was pouring sweat. I panic-rolled and closed a lot and took heavy losses and lost about 40% of my account today.

In some ways, it hurts, but then I look back to where I was a year ago. I got back in after COVID at 200 and rode it all the way here to 1,000. I got greedy and sold too close to the sun using margin.

In some instances like today, as my portfolio drops my relationships blossom. My heart opened up to my girlfriend to tell them everything. I'd been hiding my portfolio value for years from my girlfriend. It had actually caused a chasm within us as she sensed I had a barrier within us. So I finally let her know what I'd done.

Lo and behold, she has been very understanding, supportive, and... still loves me?! She really is a keeper and I'll have to lock her in before she comes to her senses.

My father has also been supportive:
Father: "When I went all-in on options in 2000 and 2008, I saw my portfolio go from $3mil to 100k."
Me:"Wow, so that's why you were so grouchy!"

Suppose my saving grace is that with these massive losses, I'm glad to have learned a very expensive lesson. I feel that I'll be in cash for a while as I fix these BPS situations. Figure at a rate of 1.5% weekly gain, I'll make my portfolio back eventually.

These are my positions and am wondering if anyone has any suggestions. Thank you!

11/12:
3 x 1110/1080
4x 1125/1100

11/19:
4x 1080/1050
20x 1120/1095

5X 1135/1125
7X 1130/1090

33% Of my portfolio currently.
Sorry to hear that, glad you see the positive in this situations.
going through 2 black swan event within 2 weeks trading options is probably 1 in a million. I have started trading and witnessed some of the greatest loss I have heard. These 2 weeks made me learn so much from everyone sharing their experiences here. I have put myself at risk on purpose to learn to manage losing trades with very small contracts. If I had started with big trades against the recommendations of the veterans here today my portfolio would be evaporated.

my support to everyone who lost big in options and who have seen 6-7 or 8 numbers drop in their core shares on paper today.
 
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Sorry to hear that, glad you see the positive in this situations.
going through 2 black swan event within 2 weeks trading options is probably 1 in a million. I have started trading and witnessed some of the greatest loss I have heard. These 2 weeks made me learn so much from everyone sharing their experiences here. I have put myself at risk on purpose to learn to manage losing trades with very small contracts. If I had started with big trades against the recommendations of the veterans here today my portfolio would be evaporated.

my support to everyone who lost big in options and who have seen 6-7 or 8 numbers drop in their core shares on paper today.
Except retracing back down after going vertical for two weeks isn't a black swan. That was somewhat predictable, which is why some people like adiggs were sitting out, and others were only selling 30% below the SP and no closer.
 
How do you go about rolling positions in your IRA? Every time I try it gives me an error abou leaving a large naked position.

Second question, for all those with experience in rolling positions - I cannot seem to find positions that allow me to roll either for a credit or to improve my strikes. for example I currently have -p1060/+p960 for Nov 12. What would be the possible roll for those to improve strikes without debit?
At least with Fidelity there is a Roll ticket, but that is for a single position.

To roll a spread there is either the Roll ticket that you then add 2 legs to, or there is a Custom ticket that you manually specify all 4 legs in. Part of the dynamic with rolling a spread is that, at least at Fidelity, the default price is the worst of the bid/ask on all 4 legs. That can turn into a pretty big whack from the b/a slippage. I usually go for the midpoint but 4 legged option trades seem like they don't fill as well. So even if you don't like being on the worst end of the b/a spread 4 times, you might need to anyway.

Therefore - if you're really taking a profit and then starting a new position, my own preference is to close the one position and then start a new one (2 tickets). Two legged tickets seem to fill faster and don't have quite as bad b/a slippage.

Next big news could be if Elon has sold yet, or is still selling. If he's done, there should be a nice bounce to hurt everyone with open BCS.

oing through 2 black swan event within 2 weeks trading options is probably 1 in a million.

One of the things I observed back in Jan/Feb/March of this year is that a big and dramatic move in one direction can easily pair up with a big and dramatic move back. The reversal may not cover as much ground as the original move but it can be really big itself. Back in Jan/Feb/March I was chasing the stock price upwards with my puts and managed to get into 820s when the shares were around 850 / spike to 900. Then they reversed aggressively and I was stuck with deeply ITM puts.

Even further back in 2013 we had the run from $30 to $180 (presplit). Then the shares reversed back to $130 (down 1/3rd). The shares never returned to $30 but short term traders selling puts could have lost a lot of money when the shares did that reversal. That would have been two big moves close together that whipped the short term traders in both directions.

I guess that one takeaway - the run up was certainly aggressive and I think too far too fast. The regression was inevitable - we just didn't know if it was going to be $2000 down to $1500; $1250 down to $1050; $1250 down to $700; $1250 down to $900. The last one is my guess if I were being held at gunpoint, but I don't know better than anybody else.

So these events aren't independent, and maybe more like 1 in 100 (1 week every 2 years, assuming weekly trading).


That bounce that @dc_h mentions is something to be watching for. Heck - it could happen tomorrow! All I know is that I don't know :).
 
Except retracing back down after going vertical for two weeks isn't a black swan. That was somewhat predictable, which is why some people like adiggs were sitting out, and others were only selling 30% below the SP and no closer.
Agreed.

Two ways this likely plays out are either support at 1020 and we consolidate gains or breakdown and support at 910 and consolidate at those levels. Could go deeper to 840, but that would need some other forces like macros or negative news in my view.

I’ll be watching 1020 closely tomorrow to decide if I roll my 950/900 BPS. Every other BPS is below 900 (except for a small number of 910 naked puts).
 
Sold almost all shares at...the bottom. Both in retirement, then my brokerage.

My OTM BPS became ITM....I'm embarrassed to say that I initially took the suggestions of the veterans here and was OTM @960/810 last week and decided to roll them up into the 1100s Friday. I woke up and saw my account drop 50% in half an hour and was pouring sweat. I panic-rolled and closed a lot and took heavy losses and lost about 40% of my account today.

In some ways, it hurts, but then I look back to where I was a year ago. I got back in after COVID at 200 and rode it all the way here to 1,000. I got greedy and sold too close to the sun using margin.

In some instances like today, as my portfolio drops my relationships blossom. My heart opened up to my girlfriend to tell them everything. I'd been hiding my portfolio value for years from my girlfriend. It had actually caused a chasm within us as she sensed I had a barrier within us. So I finally let her know what I'd done.

Lo and behold, she has been very understanding, supportive, and... still loves me?! She really is a keeper and I'll have to lock her in before she comes to her senses.

My father has also been supportive:
Father: "When I went all-in on options in 2000 and 2008, I saw my portfolio go from $3mil to 100k."
Me:"Wow, so that's why you were so grouchy!"

Suppose my saving grace is that with these massive losses, I'm glad to have learned a very expensive lesson. I feel that I'll be in cash for a while as I fix these BPS situations. Figure at a rate of 1.5% weekly gain, I'll make my portfolio back eventually.

These are my positions and am wondering if anyone has any suggestions. Thank you!

11/12:
3 x 1110/1080
4x 1125/1100

11/19:
4x 1080/1050
20x 1120/1095

5X 1135/1125
7X 1130/1090

33% Of my portfolio currently.

I am sorry. I'm nowhere near as knowledgeable as the posters here but I will try to help the best I can.

If you have a lot of realized losses, you may consider converting your 401K to a ROTH IRA. Anything you convert, you will pay taxes on but it will be offset by the losses you took. And hopefully you'll be able to load some Tesla into that new Roth IRA and pull it out later without more taxes.

As someone who prefers to go naked, my experience is a lot more limited dealing with BPS. I wonder if you can roll these out into next year and hope it goes OTM?

All the best.
 
Agreed.

Two ways this likely plays out are either support at 1020 and we consolidate gains or breakdown and support at 910 and consolidate at those levels. Could go deeper to 840, but that would need some other forces like macros or negative news in my view.

I’ll be watching 1020 closely tomorrow to decide if I roll my 950/900 BPS. Every other BPS is below 900 (except for a small number of 910 naked puts).
NOT-ADVICE.

These support levels are what I'm looking for also. My TA fu is weak, so hearing about support levels that others see is valuable to me.

I consider support at anything above 900 to be weak, simply because we traded through it so quickly, there is very little volume (relatively speaking) at any price above 900. I see 900 (or thereabouts) as support simply because it is the previous ATH. It seems like when TSLA has a big breakout, then it'll reverse at some point (it has to), but it also doesn't seem to get all the way back to or below that ATH.

Which works until it doesn't :)


The next support that I've leaned on heavily is $700. I really liked it when the shares were around $750 - $800. I could sell those 700s and then 730s week after week and make bank, with what felt like a really big support at the 700 strike to lean on. Up here in this rarified air between 900 and 1250, nothing has traded for very long or very much (relatively speaking), so I consider all of the support and resistance to be relatively weak.


Another thought that occurred to me today - I'm expecting Q4 results to be out of the park (again) and that'll make for another nice run. Maybe only back to the 1200s, but at least it'll be a more stable / likely to hold 1200. In the meantime though we're in the middle of the quarter, about as far away from previous results and the next quarterly results as we can get. That seems to make this a particularly good time to play games with the share price, both up and down.

I've also thought that I like the summer and the low IV with low daily share price moves. $10 in a day was a big deal - even if the premium/contract was low, the wins were steady. I comfortably have made my most money at low IV (in retrospect) vs. high IV.
 
I am sorry. I'm nowhere near as knowledgeable as the posters here but I will try to help the best I can.

If you have a lot of realized losses, you may consider converting your 401K to a ROTH IRA. Anything you convert, you will pay taxes on but it will be offset by the losses you took. And hopefully you'll be able to load some Tesla into that new Roth IRA and pull it out later without more taxes.

As someone who prefers to go naked, my experience is a lot more limited dealing with BPS. I wonder if you can roll these out into next year and hope it goes OTM?

All the best.
One of the ugly dynamics with spreads is that rolling for more than 1 week is unlikely to do much more for you than a 1 week roll. At least once you're ITM or fairly far ITM. Rolling while still OTM - that probably will benefit from a >1 week roll. The general idea is that the time value of the 2 legs is increasing by similar enough amounts for the extra weeks in the roll, that 2 / 3 / 4 weeks or even 6 months doesn't change things much.

Where being naked that extra time value all goes into the position and can be used for time, credit, and / or strike improvement.


I like that ROTH conversion idea - that's a good one to have in the hopper, while also being something I don't ever want to pull out.
 
NOT-ADVICE.

These support levels are what I'm looking for also. My TA fu is weak, so hearing about support levels that others see is valuable to me.

I consider support at anything above 900 to be weak, simply because we traded through it so quickly, there is very little volume (relatively speaking) at any price above 900. I see 900 (or thereabouts) as support simply because it is the previous ATH. It seems like when TSLA has a big breakout, then it'll reverse at some point (it has to), but it also doesn't seem to get all the way back to or below that ATH.

Which works until it doesn't :)


The next support that I've leaned on heavily is $700. I really liked it when the shares were around $750 - $800. I could sell those 700s and then 730s week after week and make bank, with what felt like a really big support at the 700 strike to lean on. Up here in this rarified air between 900 and 1250, nothing has traded for very long or very much (relatively speaking), so I consider all of the support and resistance to be relatively weak.


Another thought that occurred to me today - I'm expecting Q4 results to be out of the park (again) and that'll make for another nice run. Maybe only back to the 1200s, but at least it'll be a more stable / likely to hold 1200. In the meantime though we're in the middle of the quarter, about as far away from previous results and the next quarterly results as we can get. That seems to make this a particularly good time to play games with the share price, both up and down.

I've also thought that I like the summer and the low IV with low daily share price moves. $10 in a day was a big deal - even if the premium/contract was low, the wins were steady. I comfortably have made my most money at low IV (in retrospect) vs. high IV.
A few weeks of selling 900-700 and 1200-1300 IC's would be great. Build a nice base and feather the nest.
 
I am sorry. I'm nowhere near as knowledgeable as the posters here but I will try to help the best I can.

If you have a lot of realized losses, you may consider converting your 401K to a ROTH IRA. Anything you convert, you will pay taxes on but it will be offset by the losses you took. And hopefully you'll be able to load some Tesla into that new Roth IRA and pull it out later without more taxes.

As someone who prefers to go naked, my experience is a lot more limited dealing with BPS. I wonder if you can roll these out into next year and hope it goes OTM?

All the best.
Thank you for the suggestion and kind words. I didn't consider the ROTH IRA idea and will look into it.
 
Are you putting it as a roll transaction with all 4 transactions in one ticket? (Like what is below.)


That is far enough in the money that you can only roll for more time with a small credit:
View attachment 731164
I will try a 4-leg ticket tomorrow. I was trying to roll out the short leg first- which didn’t work. Then tried to roll out the long leg, which didn’t work either. This is my first time Trying to actively manage a bad put spread - so learning the ropes. Had no trouble rolling out a similar position in the brokerage account- probably because have available margin.

Ok second question, why not wait till Friday to roll? By then the time value for Nov 12 will be all gone, so wouldn’t it be better to roll then?