Wiki Selling TSLA Options - Be the House

[adiggs]

Thanks for the question / note about Evergrande. I decided that since my 995 puts for this week are ITM after 4 or 5 hours, I would go ahead and close them for like 1.50 profit.

My rapidly updating rationale - uptick rule ends in minutes and who knows - maybe Evergrande affects the market tomorrow. So just in case take $1 off the table and watch.

 

[EnzoXYZ]

what crazy swings!!

took the opportunity to closed my 1115 CC that went badly with Hertz announcement. I really thought it would take rest of the year to get out. I did NOT expect Elon to help me.

closed 1/3 of BPs.

 

[traxila]

RE: EVERGRANDE

This is very much a problem with Chinese real estate specifically. It is actually a quite spectacular problem with Chinese real estate specifically. I am sure everyone here has seen the empty overpriced cities in China built on debt and waiting for buyers at prices that Chinese people just cannot afford. This is the type of activity Evergrande has been involved in. It has suddenly been understood that these properties will never sell, and everyone in China has zipped up their pockets.

But Western banks are mostly not involved.

Banks Race to Assure Markets Evergrande Exposure Is Limited

European bankers have spent the past few days reassuring investors, clients and regulators about any fallout from China Evergrande Group as questions swirl about the world’s most-indebted property developer.

www.bloomberg.com

So a 2008 derivative style global tsunami is probably not in the works outside the Chinese banking system. The fear is that dealing with this issue plunges China into recession (when was the last time that happened?) causing a severe drag on the global economy and global trade.

IMO, Beijing will not allow this to happen. They will OTOH find scapegoats to be punished at varying degrees, and billionaires to be publicly dressed down, drained and humiliated.

Evergrande will be a festering boil for a while, like inflation it seems, something for the media to go to as an explanation whenever they need reasons for why something happened in the market.

EDIT: This link should work for all:

China’s Plan to Manage Evergrande: Take It Apart, Slowly

Beijing is working on a controlled implosion of the real-estate giant, selling off some of its assets while limiting damage to home buyers and businesses involved in its unfinished projects.

www.wsj.com

I am sure the big boys are positioned for some take downs on the market right now after that terrific rally, but I doubt a true correction will start here. Wrong time of year absent a true and prevailing crisis. Don't believe Evergrande fits the bill.

Come the new year.... situation will probably be different.

 

[JustMe]

A profitable day. Yay

Only serious stress came when I bought an 11/12 $1,000 p at the start of the last big dip of the day. Tried to sell for a tidy profit a minute later and my order was rejected again and again
I watched the profit grow, evaporate, and then turn to a big loss as I worked my way through the stupid robotic customer service line - complete with having to reset my pin! “You have chosen to change your pin, please confirm…” *Shut up you £%#*^€ robot!!*

TD Ameritrade made it right and gave me the closing price of my first attempt. Profit secured System error of some kind.

Importantly, they gave me the direct line for the trading desk.

I closed out all put spreads at >50% profit ahead of tomorrow’s who-knows-what.

 

[ammulder]

Well, I got caught on the wrong side of this one… just too close to the sun. So much for my line of thinking about $200 drops being unlikely. Ah, Elon.

I‘ve rolled my put spreads out a week for decent profit except the small number under $1000 (want them to expire to reclaim margin) and a few 1050-1100: just waiting to see if I can time a good roll on those, but there aren’t so many I couldn’t just take the loss if needed.

Stull, I won’t be in a great spot if we stay under $1050 for a long time… here’s hoping sanity (and China delivery numbers) prevails.

 

[MXWing]

Well, I got caught on the wrong side of this one… just too close to the sun. So much for my line of thinking about $200 drops being unlikely. Ah, Elon.

I‘ve rolled my put spreads out a week for decent profit except the small number under $1000 (want them to expire to reclaim margin) and a few 1050-1100: just waiting to see if I can time a good roll on those, but there aren’t so many I couldn’t just take the loss if needed.

Stull, I won’t be in a great spot if we stay under $1050 for a long time… here’s hoping sanity (and China delivery numbers) prevails. ELON FFS FILES THAT FORM4 BENEFICIAL CHANGE IN OWNERSHIP ON IR.TESLA.COM

Fixed that for you. That's going to be the best path to 1050+

Good consolidation at 1100 sounds about right. Personally I feel anything higher than 900 is risky given all the macro bombs in play right now.

 

[MindOverMatcha]

With ITM BPS, I've rolled them to 11/19 and 11/26. This is my first time doing this so apologize for the ignorance. Appreciate any insights as I've been in the fight-flight mode for the past few days.

I'm thinking about the goal with ITM BPS. I'm rolling to "buy" time, so that the share price can make my ITM BPS, OTM, so that I can close it that week they expire. I then settle for a loss that is not as bad as what I'm facing now.

The trouble I'm finding is that the stock price is so volatile, I fear that the week I feel "safe" for my BPS to be OTM, the stock might drop and I go ITM, on say a Thursday or Friday, making it difficult to roll.

I'm wondering if the goal is to be say, 10-15% OTM that week from the share price. Find a point where I can just close it.

I'm at:
11/19, 1135/1110 ; 1125/1090; 1130/1135
11/26, 1080/1050 ; 1125/1100

Given how deep ITM some of these are, I'd have to roll them up on a week with a "solid" 1200 share price. I imagine this might be when Berlin comes online and the earnings report comes out. In which case, I'm imagining I have to roll these out to December or January.

Would really appreciate your thoughts, as I'm trying to see what dates I can shoot for. If a month out is worth doing, I'll definitely do it. Especially if there's not much difference between 1-2 weeks and 3-4 weeks. I'm very pessimistic about these next few weeks, but feel that as we get into December and close to January, a lot of catalysts may be announced and the stock will rise, hopefully creating enough buffer from my BPS.

 

[Ogre]

Had a good day myself. Had a bit of a bumpy ride yesterday and bought a mix of vertical call spreads yesterday afternoon thinking it would play out over the rest of the week. Wound up selling them this afternoon for a quick profit, erasing my loss from Tuesday’s chaos and then tacking a little profit on top.

I also sold some more 1085 naked puts a couple weeks out. That’ll get me an entry price of 985 if they get called or a nice little profit of $10k/ contract if they don’t. Either way I’m happy.

Well… not if things get too upside-down and I end up paying 985 for shares selling at $700!

 

[bkp_duke]

Confirmed, Elon sold shares:

SEC.gov | EDGAR Full Text Search

www.sec.gov

 

[Chenkers]

With ITM BPS, I've rolled them to 11/19 and 11/26. This is my first time doing this so apologize for the ignorance. Appreciate any insights as I've been in the fight-flight mode for the past few days.

I try to not allow rolls to get more than a week out. Unless they're extremely DITM there's usually not the need to go beyond a week. This avoids the frustration of watching a week go by that your BPS would have expired if they hadn't already been rolled out a further week.

I'd also make the comment that people trading options need to avoid panic at all cost and learn to take a more considered approach with moves. While a quick action can often be good, panic moves can be very harmful. There is always another course of action available and sitting down and planning out the next move can avoid damage and often gives a better result.

Edit: I just saw the jump in share price and checked Tesla ir to see Elon's Form 4. But @bkp_duke beat me to it.

 

[MP3Mike]

Confirmed, Elon sold shares:

SEC.gov | EDGAR Full Text Search

www.sec.gov

But it only covers Monday the 8th. (The sale of 934,091 of the ~2.1 million shares he acquired.)

We will probably see more forms filed tomorrow.

 

[bkp_duke]

But it only covers Monday the 8th. (The sale of 934,091 of the ~2.1 million shares he acquired.)

We will probably see more forms filed tomorrow.

Refresh that page. 2nd filing is up now.

 

[MP3Mike]

Refresh that page. 2nd filing is up now.

Yeah, and those two combined show the sale of ~934k shares.

 

[jaspa]

Looks like the AH market is liking the certainty of the news

 

[mongo]

And just like that, my puts from Monday look like a good idea* (not as good as buying shares today would have been though).
Does anyone else read the thread title as "Bet the house" ?

*we'll see how they look during market hours...

 

[elasalle]

Turnaround for tomorrow
BPS good
BCS bad

 

[Chenkers]

There's been some resistance at $1100, including just now, but the real test will be during market hours. Then it's a question of whether MM can get their desired close (currently $1120) or if institutions will walk all over them again.

 

[ammulder]

Now I don’t know what the hell to think. I was convinced there was no business reason for a $200 drop. Then Elon tweeted and we got it. Then I thought I was an idiot for thinking it needed to be a business reason when things unrelated to Tesla’s performance can deliver the drop. Now Elon files the paperwork and we’re nearly $100 back up and I think I wasn’t mistaken. I feel dumb for rolling and taking steps to manage my margin instead of sticking it out and collecting the usual profit. My head is spinning.

Heres what I do know: I slept poorly last night, and I’ve been exceeding my income goal week after week. I need to leave more margin unused. Maybe also work farther OTM or look at the @PastorDave plan of big percentage gains on acceptable total losses (though to be honest I still find it hard to believe that works long term). If I used half as much margin, I feel that I could put an entire week’s trades into the eternal roll holding pattern and go to work with the other half at the new low… but I’m not normally doubling my income goals yet.

If we stabilize around $1100, I think I’ll still end up better off financially than if I had sat out the whole week. But the sleep thing wasn’t pleasant.

I might just be too close right now. Hopefully I’ll be clearer on all this tomorrow.

 

[JustMe]

Confirmed, Elon sold shares:

SEC.gov | EDGAR Full Text Search

www.sec.gov

Dang, it’s a good thing he sold on Monday! He just missed that sell off the next morning

 

[Drezil]

Does anyone else read the thread title as "Bet the house" ?

My 750k loss yesterday might agree with you..

No worries. All safe if we come back to 1250 by Dec expiration..