Wiki Selling TSLA Options - Be the House

[vikings123]

Elon sold more shares yesterday 11/11, looks like another 640K shares. Given that Elon is selling in smaller chunks and is likely not done with his selling I’m going to predict that TSLA will be range bound for a while. Traders and hedgies will stay away until the dust settles.

As a result I think we will see premiums drop and we could get another chance to reload LEAPs in December when his selling is mostly complete. I also feel like we can be more aggressive with selling calls for the next few weeks.

Thoughts?

 

[bkp_duke]

Elon sold more shares yesterday 11/11, looks like another 640K shares. Given that Elon is selling in smaller chunks and is likely not done with his selling I’m going to predict that TSLA will be range bound for a while. Traders and hedgies will stay away until the dust settles.

As a result I think we will see premiums drop and we could get another chance to reload LEAPs in December when his selling is mostly complete. I also feel like we can be more aggressive with selling calls for the next few weeks.

Thoughts?

Isn't he limited in the number of days he can trade? Someone in the other thread mentioned the last day he can trade due to SEC rules this quarter would be Nov 19th. I haven't independently verified this, however.

 

[Knightshade]

Isn't he limited in the number of days he can trade? Someone in the other thread mentioned the last day he can trade due to SEC rules this quarter would be Nov 19th. I haven't independently verified this, however.

Manually trade- yes.

Window opens 2 days after earnings is announced, closes 20 trading days later.

however

If he's using a 10b1 plan filed previously (as he did for Mondays trades for example) then trades outside that window can happen.

 

[bkp_duke]

Manually trade- yes.

Window opens 2 days after earnings is announced, closes 20 trading days later.

however

If he's using a 10b1 plan filed previously (as he did for Mondays trades for example) then trades outside that window can happen.

But those were JUST the options exercise. If you look at the Form 4 filings, ALL the other trades have been outside of the 10b1 (i.e. the 10% sales to pay taxes).

 

[mongo]

Isn't he limited in the number of days he can trade? Someone in the other thread mentioned the last day he can trade due to SEC rules this quarter would be Nov 19th. I haven't independently verified this, however.

Seems to 4 weeks before end of quarter, so all of November would be open.
Quiet Period

Edit: that's a different window on news. Some companies call out 20 days for trading, but Tesla does not seem to.

 

[bkp_duke]

Seems to 4 weeks before end of quarter, so all of November would be open.
Quiet Period

Interesting. So that gives him plenty of time to trickle these out and hit the 10% mark, without a larger dump like what we saw on Tuesday.

One can hope.

 

[Chenkers]

Elon sold more shares yesterday 11/11, looks like another 640K shares. Given that Elon is selling in smaller chunks and is likely not done with his selling I’m going to predict that TSLA will be range bound for a while. Traders and hedgies will stay away until the dust settles.

As a result I think we will see premiums drop and we could get another chance to reload LEAPs in December when his selling is mostly complete. I also feel like we can be more aggressive with selling calls for the next few weeks.

Thoughts?

Agreed on selling aggressive calls, at least up until Elon is done with selling shares. I also have a lot of rolled ITM BPS that make it a lot easier to sell more aggressive BCS. The BPS use up a lot of margin while the BCS add to my margin. So I'd rather the BPS go OTM, even if it risks the BCS going ITM. Plus the revenue from aggressive BCS can be used to improve the BPS position.

 

[mongo]

Interesting. So that gives him plenty of time to trickle these out and hit the 10% mark, without a larger dump like what we saw on Tuesday.

One can hope.

I edited my response. Some companies call out a 20 day trading window, but Tesla does not appear to.

 

[bkp_duke]

Another reason for sale of oldest lots of shares could be to reduce his taxable basis in the state of CA.

I believe everything he has obtained to date through performance awards was granted as taxable in that state, but we also know he has no love for politicians in CA and would probably want them to get less $$$ now instead of more $$$ later as the stock price appreciates on very old share lots.

 

[mongo]

Another reason for sale of oldest lots of shares could be to reduce his taxable basis in the state of CA.

I believe everything he has obtained to date through performance awards was granted as taxable in that state, but we also know he has no love for politicians in CA and would probably want them to get less $$$ now instead of more $$$ later as the stock price appreciates on very old share lots.

From what I read (grain of salt) CA taxes on options depend on the percentage of time he was in CA between grant and exercise. The longer he waits on the 2018 plan, the more it will be covered by TX 0% income tax.
I *think* pure capital gains taxing is just state of residency at the time of sale.
https://www.ftb.ca.gov/forms/misc/1100.html

 

[elasalle]

Agreed on selling aggressive calls, at least up until Elon is done with selling shares. I also have a lot of rolled ITM BPS that make it a lot easier to sell more aggressive BCS. The BPS use up a lot of margin while the BCS add to my margin. So I'd rather the BPS go OTM, even if it risks the BCS going ITM. Plus the revenue from aggressive BCS can be used to improve the BPS position.

Any Berlin GF positive news ( ~ 11/22) or GF Austin news should be factored in.
After that, smooth sailing till Jan 1st week when quarterly prod numbers will appear.
cheers!!

 

[Knightshade]

I edited my response. Some companies call out a 20 day trading window, but Tesla does not appear to.

Yes, they do.

https://www.sec.gov/Archives/edgar/data/1164964/000101968715004168/globalfuture_8k-ex9904.htm#:~:text=An%20Insider%20should%20never%20trade,a%20legitimate%20Company%20business%20purpose

Window Period.
...
The Window Period opens on the second trading day after the day the Company’s quarterly or annual earnings figures are publicly released. For example, if the Company publicly releases its earnings after the market opens on a Monday, the Window Period would be closed and would remain closed until it opens at the open of the market on Wednesday (assuming no intervening holidays). The Window Period will remain open for a period of 20 full trading days and will close at the end of the 20th day. Transactions involving the purchase or sale of the Company’s stock must take place during this 20-day period. Directors and officers must obtain pre-clearance for trades even during the Window Period. The Company reserves the right to change these dates without prior notice.

Note that a purchaser or seller who is aware of material nonpublic information cannot buy or sell even during an “open” window. In such a case, the Insider with knowledge must not trade until the second trading day after the information of which he or she is aware becomes public.

Below that it describes the exceptions that include the 10b1 plan

 

[mongo]

Yes, they do.

https://www.sec.gov/Archives/edgar/data/1164964/000101968715004168/globalfuture_8k-ex9904.htm#:~:text=An%20Insider%20should%20never%20trade,a%20legitimate%20Company%20business%20purpose

Below that it describes the exceptions that include the 10b1 plan

Right, some companies do like Global Future City Holding Inc. (the “Company”) which is who you linked to and it appears to be taken on by them, not a requirement of the SEC:

To avoid such an appearance, the Company has adopted guidelines (the “Window Period”) covering the purchase or sale of its stock or other securities by Insiders. The Window Period is a Company rule designed to protect the Company and its Insiders. The Window Period opens on the second trading day after the day the Company’s quarterly or annual earnings figures are publicly released. For example, if the Company publicly releases its earnings after the market opens on a Monday, the Window Period would be closed and would remain closed until it opens at the open of the market on Wednesday (assuming no intervening holidays). The Window Period will remain open for a period of 20 full trading days and will close at the end of the 20th day. Transactions involving the purchase or sale of the Company’s stock must take place during this 20-day period. Directors and officers must obtain pre-clearance for trades even during the Window Period. The Company reserves the right to change these dates without prior notice.

I have not found a similar document/ window for Tesla.

 

[MindOverMatcha]

Some digging your self out of the hole and survival strategies:
1. Downsizing- close some positions with losses and use the monies to further close other positions

2. If you have shares to sell or margin, you could convert some of the BPS.
Roll the short leg which is at a loss to Jan 24 Leap Put and get as much premium as possible
The current long leg should have some profit, so close it
Use the premium from the leaps to further close other BPS positions

3.if you have shares , sell Jan 24 CC for 1900+ strikes and get premium. Use premium to close loosing BPS

I think for weekly sell strategies, one should stay on top of max loss/return at all times. For like 1000$ gain at 2%, max loss will be like 50K. So how much monies can account afford to lose per week should be factored in before thinking of annual returns by compound interest.+ personally trying to keep weekly amount the same and using proceeds to offset margin, for other strategies

Cheers!!

I appreciate it!

For position 2) that seems like a good bet for me. Curious why roll short put to Jan 24 instead of closer to say Jan 21? Or is the strategy to roll as little # of short legs as possible, to get so much premium that I'd have enough to close other BPS positions.
Also, realizing that Jan 24 put can be a much ower strike price if needed. Trying to think what would be a low strike price.
Or would selling a less further out date at higher strike price be better?

When would you close the Jan 24 short leg?

I was able to save a $50 wide bps when my long strike was atm by going full butterfly with it.. the credit I got for that $50 wide bps was so big that it reduced my max loss to almost nothing. In the end I closed both spreads for a slight profit.

Now trying this again, I have +p1050/-p1100/-c1100/+c1150 expiring today.. I will close the bcs and roll bps to next week. I am prepared to widen the bps if needed to roll for credit.

Mind you, these are experimental small positions for me, only 2 contracts..

Wow thank you. I see that if we are trading sideways, BCS would help a lot. In what week do you do BCS?

Say if I have 11/19 BPS ITM, you'd do a BCS that week, try to close BCS Thurs/ Friday ( as long as SP doesn't make BCS ITM), then roll 11/19 BPS to 11/26.

I also have 11/26 BPS. Would it make sense to open a 11/19 BCS on those 11/26 BPS?

 

[elasalle]

I appreciate it!

For position 2) that seems like a good bet for me. Curious why roll short put to Jan 24 instead of closer to say Jan 21? Or is the strategy to roll as little # of short legs as possible, to get so much premium that I'd have enough to close other BPS positions.

When would you close the Jan 24 short leg?

idea is to get as much premium (Other Peoples Money - OPM )to resolve your current issues.
If you think SP will be greater than 1100 by Jan 24, you wouldn't need to close it - worst case in jan 24 someone assigns you and you get the shares which might be trading under 1100. You cannot resolve all situations by shuffling.

main thing here is you are trading time for money. (Options drive home the fact that time is the ultimate currency )

cheers!!

 

[MindOverMatcha]

idea is to get as much premium (Other Peoples money )to resolve your current issues.
If you think SP will be greater than 1100 by Jan 24, you wouldn't need to close it - worst case in jan 24 someone assigns you and you get the shares which might be trading under 1100. You cannot resolve all situations by shuffling.

main thing here is you are trading time for money. (Options drive home the fact that time is the ultimate currency )

cheers!!

Thank you for the idea!! I see that and I'll take what I can get. Psychologically, I may feel better just closing everything out using the LEAP premium.

 

[intelligator]

Thank you for the idea!! I see that and I'll take what I can get. Psychologically, I may feel better just closing everything out using the LEAP premium.

Reading along, elasalle and your dialog, good stuff! I too like the LEAP approach to raise cash. My dilemna is that I used margin and when TSLA dives, the margin goes away, all I can do is add cash to close positions. About assignment, I fret over this quite a bit. What is the probability of assignment on a 12/17 950 -P or a 11/19 900 -P. Tuesday/Wednesday I closed a 11/12 position concerned that it'd be assigned, want to avoid the same knee jerk bad choice if at all possible.

 

[BornToFly]

The downside of the 2024 LEAP Put is you will have a lot of margin tied up for two years, which means you can't make any money with that margin for two years. If you can sell only a few to make enough money to close out your other positions, it might be worth it?

 

[corduroy]

STO BPS 11/12 -790/690.

33% and $390 OTM, and if I have to mange these I'm resigning from options trading.

Update: closed for .02 for $2.48 profit each. These were opened 10 days out and survived the Elon tweet unmanaged.

I guess I'm not resigning after all.

 

[BornToFly]

Thank God Macros are doing ok., or we would be diving to 900....