Wiki Selling TSLA Options - Be the House

[BornToFly]

Many lessons, but my biggest takeaway is probably this - I don't need to force trades anymore. I felt like I had to make trades every week no matter what, to keep that income flowing. This made me enter into trades that too were early, before I really knew what was going on with the SP trend. I plan to do things different going forward. I want to sit back and be more patient before entering new trades - wait for them to come to me. If there are no good setups for the day or the week, don't do anything. Focus on quality over quantity.

How far OTM were your trades? The previous 6 months were easy because of a slow steady climb. Maybe the biggest takeaway should be - stay far OTM with wide spreads because the SP trend can reverse at any moment. You can never really "know what is going on with the SP trend." The only time I think we kind of know is a couple weeks before the end of the quarter, and before the ER. That is when I will get closer to the SP with my BPS.

 

[adiggs]

This is nothing new, people have discussed this before. @adiggs seems to be great at this. But it was one of those things that just never clicked by reading others talk about it. I had to experience the repercussions myself. Now I get it and am looking forward to a reset and coming back with a fresh approach.

It only took me 15 months to figure this out . Namely that I don't need to be in the market 100% of the time and I can even take whole months off if I want/need to. And to sell (open) into strength while buying (close) into weakness.

As many of us have observed this is the value of this thread to me, and I think all of us - we can learn from each other. For those that find this idea valuable, hopefully you get there with less than 15 months of education. No tears for me - I still earned 2x the paycheck income last year while I was learning - I like being paid to gain an education.

Probably my biggest learning of the year are put spreads. It only took others talking about them and extolling their virtues (and liabilities - there are always tradeoffs) for about 5 months before I finally heard them. But I did hear finally, and I'd never have gotten there without this thread.

 

[bkp_duke]

Wonderful decay in 11/19 options today. Rolled everything forward to next week. BPS 875/930

 

[Zhelko Dimic]

Interesting reversal. BTC all my put contracts I had opened yesterday for a 75% profit overall.
I don’t know if I should STO more call contracts. Is it going higher

Just a thought:
Imagine Elon has scheduled 10 tranches of his 10b plan, with which he'll sell around 9.2M shares over time. First two are executed.
If his target is only 17M shares and my math is right, he's got 2.4M shares to sell starting today. That could be done in two days, and come Thursday, we may be free of Elon's selling...
Just a possibility.
But some traders may be anticipating this scenario and this could be why price is up today.

 

[dww12]

So the inflection is when Elon has sold half? I did not think they would wait for the last day but ok.

 

[PastorDave]

Just a thought:
Imagine Elon has scheduled 10 tranches of his 10b plan, with which he'll sell around 9.2M shares over time. First two are executed.
If his target is only 17M shares and my math is right, he's got 2.4M shares to sell starting today. That could be done in two days, and come Thursday, we may be free of Elon's selling...
Just a possibility.
But some traders may be anticipating this scenario and this could be why price is up today.

I see 3 possibilities:
1, exactly what you said above
2, Elon for some reason choose not to sell any shares today, and this is what the normal price action looks like without him selling
3, Double bottom around 987 spooked the shorts, and they're covering / longs thinking we've hit the bottom yesterday for the same reason.

I'm leaning towards a combo of 1 and 3. I like this a lot more than a move down to 950, so I'm happy whatever the reason.

 

[strago13]

Wonderful decay in 11/19 options today. Rolled everything forward to next week. BPS 875/930

Honestly, even my 11/26 870 Put's which I rolled down from 11/19 890 yesterday are currently sitting at 76.29%....I am likely going to close those and open a new position. I am not convinced that this dip is over yet

 

[PastorDave]

So the inflection is when Elon has sold half? I did not think they would wait for the last day but ok.

If he's going to follow a pattern of selling ~1m shares every Monday for several more weeks, the inflection wouldn't wait for 4 weeks (9 Mondays left on those sales). It should be when he's almost done selling every day, which is possibly by Thursday. That's one possible scenario, at least.

 

[alterac000]

Closed out $940 P's this morning on the pop at 85% - STO Friday at $13, BTC today at $2.20
Not bad for 2 days, I am never stuck on a percentage of closing or getting everything out of them. Doing this as income replacement for my wife who retired recently and feel much safer with straight puts than a spread.
I am making more than she was as a Nurse Practitioner every week than she was making (gross + benefits) every 2 weeks.
Definitely can sit out for a week or 2 and have done so, but great prices on Puts makes it hard to stay away.

Will be looking to open next weeks Puts later today or tomorrow on a pushdown for hopefully the same credit ($13 ish per contract)

Also for those that are keeping tabs (mentally) on my $1200 puts from 2 weeks ago - I rolled them again for extra time and premium yesterday on the dip -
Out to 12/03 for an additional $40! Same strike at $1200.
My goal with these as an experiment was to keep rolling the same strike out and collecting as much premium as possible for a deep ITM position and so far I have collected just under $210 each contract in premium, effectively making my cost basis $990 if they get assigned (I have the cash).
Maybe with another roll I will just let them assign and keep the shares costed below $950 and wheel them aggressively with ITM CC's to see how that goes.

This has created a good learning situation for me having deep ITM contracts and still making money with them to allow for much more flexibility in my approach should things go against me.


Cheers!

Thanks for sharing, I will do the same with my 1200p. I haven't collected as much as you but principles are the same and I'll learn from this experience!

 

[UltradoomY]

Kind of OT but relevant to our endeavors....
Just saw on CNN business - "Rivian $140B market cap with $0 in sales becomes the #3 automaker in the world"

I know it shouldn't effect TSLA but the sword that makes it look like TSLA is a bargain at it's current valuation, also cuts when RIVN eventually gets dropped off the cliff.
Would definitely (IMO) be an electric car market sell off when that happens.
Not sure if that is in a week or a month but I do see it as an upcoming 7% down day for no other reason than RIVN is selling off.

Retorts are welcome - as I am usually out in the weeds on these things, as the bulk of my knowledge is in TSLA and Tesla.

 

[stealthyc]

Kind of OT but relevant to our endeavors....
Just saw on CNN business - "Rivian $140B market cap with $0 in sales becomes the #3 automaker in the world"

I know it shouldn't effect TSLA but the sword that makes it look like TSLA is a bargain at it's current valuation, also cuts when RIVN eventually gets dropped off the cliff.
Would definitely (IMO) be an electric car market sell off when that happens.
Not sure if that is in a week or a month but I do see it as an upcoming 7% down day for no other reason than RIVN is selling off.

Retorts are welcome - as I am usually out in the weeds on these things, as the bulk of my knowledge is in TSLA and Tesla.

An alternate future scenario might see people moving out of RIVN into TSLA.

 

[Bunky]

Theta decays faster if I stare at these positions right?

 

[dww12]

If he's going to follow a pattern of selling ~1m shares every Monday for several more weeks, the inflection wouldn't wait for 4 weeks (9 Mondays left on those sales). It should be when he's almost done selling every day, which is possibly by Thursday. That's one possible scenario, at least.

The front running. You can’t be selling short on the last day everyone will buy in anticipation. What % does it stop. May be right in the middle.

 

[traxila]

I made $12,500 a little earlier selling 100X RIVN 125 Puts for this Friday. Total gamble since I don't know if it crashes hard the next three days. But just keeps going up for now....

Pushing back on you. Bought DEC 200 puts.

Best part is we can both win big.

 

[Tslynk67]

When we dipped to the 1030's I spotted that I could roll 11/19 ccc1055's to 11/26 ccc1100's for +$2, which seemed like a decent deal to me, so I took it for 40x of the positions (which are secured by 40x Feb c1100's, so strategy is to either expire these or roll them up to Feb ccc1350 for $1m potential profit), I still have 25x in play, but I'm not convinced on this "recovery" yet and will let them run - these are secured by Jun 22 c700's and Jun 23 c800's, so lots of room to roll and play

I did look at selling some BPS for next week, but would want to be at least $200 away from the money and the premiums just didn't appeal

 

[Tslynk67]

Pushing back on you. Bought DEC 200 puts.

Best part is we can both win big.

I also looked at the $RIVN option chain - 195/200 BCS were tempting, but honestly the stock has zero grounding in reality, for all I know it could go up another 100% next week, pure gambling

As we discussed before, we all know Tesla and $TSLA side out, all the news, all the catalysts, all the FUD, the past performance, the state of the options market, Max Pain and and underlying gut feeling for where it might go - which is sometimes wrong, but more often than not, correct. It's a big advantage

 

[deerfield]

I have 021822 850CC that I've been rolling along. Thinking of just letting them go at that time. But also looking to turn those into a short straddle. Selling 021822 850P is a about $49 now. So lost would be below $800 by then. Looks like good premium if I'm okay keeping the shares. Anything else I'm not seeing? If it does hit, I do intend to fund it by selling current shares.

 

[BrownOuttaSpec]

I'm still holding onto my 780/880 for this week at 95% profit so far just because I don't plan to make any more moves until either late this week or early next week. There is too much potential volatility for my "safe" trading strategy for me to enter into a position right now.

If the "Elon selling on Monday" hypothesis is correct I might open some new BPS positions Monday if there is a dip.

FYI: Next week is a holiday week in the US . I believe shortened trading hours due to Thanksgiving and the Friday after: Link. Aren't "holiday weeks" typically a little less volitile than normal weeks? (Although past trading history has no bearing on future trading history)

 

[generalenthu]

I'm still holding onto my 780/880 for this week at 95% profit so far just because I don't plan to make any more moves until either late this week or early next week. There is too much potential volatility for my "safe" trading strategy for me to enter into a position right now.

If the "Elon selling on Monday" hypothesis is correct I might open some new BPS positions Monday if there is a dip.

FYI: Next week is a holiday week in the US . I believe shortened trading hours due to Thanksgiving and the Friday after: Link. Aren't "holiday weeks" typically a little less volitile than normal weeks? (Although past trading history has no bearing on future trading history)

Good point. Have been rolling a bunch of stuff today, and was thinking these are okay premiums, not great. But given next week's holiday, I do think these are / were good premiums in fact.

Was talking to my wife about thanksgiving earlier in the day, but didn't do the 2+2.

 

[mickificki]

opened up 25x 875/775 bps @2.82, 11/26 exp when tsla "dipped" earlier. Not sure what to do with my 11/19 1075 strike CC's.

stock recovered nicely from the dip to ~$25 earlier this hour. Maybe not a good sign for my CC's. We'll see what tomorrow brings.