Wiki Selling TSLA Options - Be the House

[EVCollies]

I am and I am paying that loan borrowing from my account at ~1% interest. Selling puts to bring the margin balance back to positive.

If this loan doesn't decrease you ability to invest, bravo!

 

[traxila]

Ok folks, need some advice. My core tesla position is 100strike leaps that expire Friday and a much smaller position in just shares. My goal is to exercise them to avoid the huge tax burden of just closing them, but that would require dipping into about 300k of margin. I could sell the other long term shares to fund that 300k which would incur much less taxes. Part of the dilemma is my monthly expenses for a home build are going to start ramping up come April-May. Ive been withdrawing from IBKR account using it as a loan for a home build and selling puts and put spreads to cover the current monthly withdrawals

Would you all do:

1. Sell ~300shares to cover the 300k needed. Continue selling bi-weekly puts at my current rate.
2. Sell 300-600shares to cover the 300k and pad my cash reserves allowing me to start selling more bi-weekly puts than I was before.
3. Sell 500-600shares to cover the 300k and fund the purchase of 650 strike leaps to replace sold shares. Continue selling bi-weekly puts at my current rate.
4. Not sell anything, go negative 300k. Continue selling bi-weekly puts at my current rate.

Not an advice, but I would go with 4. You could always sell shares later if you had to, no?

Got 304 leaps coming due on Friday. That’s 304K I am planning on clearing with options sales eventually. No hurry. Slow and steady.

 

[generalenthu]

Not an advice, but I would go with 4. You could always sell shares later if you had to, no?

Got 304 leaps coming due on Friday. That’s 304K I am planning on clearing with options sales eventually. No hurry. Slow and steady.

These are $10 strike leaps? Easy decision to take delivery!

To @Tyler34 :

Your margin capacity might actually increase as you take delivery as you probably are not getting any credit for those deep itm calls.

In a position like yours last year, I just exercised it and cleared off the debt with option sales. It's far more efficient than incurring a large tax bill.

Additionally, this week might be a particularly bad time to sell, as several of these trades are possibly getting rolled into lower Delta positions, potentially causing a bit of weakness, which should reverse itself on Monday.

 

[samppa]

Ok folks, need some advice. My core tesla position is 100strike leaps that expire Friday and a much smaller position in just shares. My goal is to exercise them to avoid the huge tax burden of just closing them, but that would require dipping into about 300k of margin. I could sell the other long term shares to fund that 300k which would incur much less taxes. Part of the dilemma is my monthly expenses for a home build are going to start ramping up come April-May. Ive been withdrawing from IBKR account using it as a loan for a home build and selling puts and put spreads to cover the current monthly withdrawals

Would you all do:

1. Sell ~300shares to cover the 300k needed. Continue selling bi-weekly puts at my current rate.
2. Sell 300-600shares to cover the 300k and pad my cash reserves allowing me to start selling more bi-weekly puts than I was before.
3. Sell 500-600shares to cover the 300k and fund the purchase of 650 strike leaps to replace sold shares. Continue selling bi-weekly puts at my current rate.
4. Not sell anything, go negative 300k. Continue selling bi-weekly puts at my current rate.

If you have negative cash balance at IBKR, you might not be able to withdraw anything. Check that before you make a decision.

My cash balance went negative after somw ditm puts were assigned, and then I couldn't withdraw anything until I brought it back to positive. Could still sell/buy options and stock and use remaining margin, but they did not allow cash withdrawals.

 

[ABC2D]

I have some -1030/+830p for this week and wish I will not be rolling them, but this week will be volatile expiration

 

[TheTalkingMule]

I'm fairly extended already, but 1/21 BPS $1000/$900 is looking mighty juicy at ~$17. Great open for all you folks with cash/margin. Enjoy!

 

[BrownOuttaSpec]

I'm fairly extended already, but 1/21 BPS $1000/$900 is looking mighty juicy at ~$17. Great open for all you folks with cash/margin. Enjoy!

Already down to $12 $8. I hope someone was able to make some quick money

Edit: Updated price.

 

[Tyler34]

If you have negative cash balance at IBKR, you might not be able to withdraw anything. Check that before you make a decision.

My cash balance went negative after somw ditm puts were assigned, and then I couldn't withdraw anything until I brought it back to positive. Could still sell/buy options and stock and use remaining margin, but they did not allow cash withdrawals.

I've been withdrawing with a negative balance for 8 months no problem. Maybe you were out of margin or don't have the correct permissions or something. I'm in the US, so that could have something to do with it.

As of now I've exercised all of them, and sold 100 shares (realizing 40k in ltcg), taking me to -266k cash balance. Still deciding how fast I want to get that cash balance closer to positive.

 

[BornToFly]

Impressive strength. There might be hope for my 1050/850 BPS for next week....

 

[TheTalkingMule]

Already down to $12. I hope someone was able to make some quick money

I'm not even too upset I missed that little opportunity to overextend withinimal risk. What have I become?

You people have ruined me. I used to be beautiful! Buying Friday calls like a lunatic on mornings such as this.

 

[wooter]

Already down to $12. I hope someone was able to make some quick money

I already had 1x Jan21 1000/900bps set up, but IBKR nanny was whining again at 1020 so I had gotten 1x Feb04 800 put to add to margin. And then I did see the Jan21 1000/900bps do its thing so I added another to it.

Like someone said, open in the direction you want it, close when the direction is against you.

The question is now: will we continue, or reverse?

 

[jeewee3000]

The 1/28 call option premiums seem quite inflated due to the coming earnings report.

Just sold some 1400cc's @1.77 (!). I really don't think this price can be hit by next friday. And if it does, they can take my shares at that price for all I care.

Fun fact, the $1400 strike price is 32% OTM and 12% beyond ATH. IV crush here we come.

EDIT: sold 1/28 1450cc's as well @1.15.

This covers all my shares and leaps, which I rarely do, but I really don't see us getting to $1450 in 9 trading days.

 

[samppa]

I've been withdrawing with a negative balance for 8 months no problem. Maybe you were out of margin or don't have the correct permissions or something. I'm in the US, so that could have something to do with it.

As of now I've exercised all of them, and sold 100 shares (realizing 40k in ltcg), taking me to -266k cash balance. Still deciding how fast I want to get that cash balance closer to positive.

Yeah, could be that that restriction only applies to european accounts.

 

[BornToFly]

The 1/28 call option premiums seem quite inflated due to the coming earnings report.

Just sold some 1400cc's @1.77 (!). I really don't think this price can be hit by next friday. And if it does, they can take my shares at that price for all I care.

Fun fact, the $1400 strike price is 32% OTM and 12% beyond ATH. IV crush here we come.

EDIT: sold 1/28 1450cc's as well @1.15.

This covers all my shares and leaps, which I rarely do, but I really don't see us getting to $1450 in 9 trading days.

I though about selling the same, but I keep thinking if we climb this week (or early next week) those 1400 will be worth a lot more, so I continue to wait and see.

 

[scubastevo80]

Impressive strength. There might be hope for my 1050/850 BPS for next week....

And ours (1050/960s)... not worried about the 950/850 and 920/810s, just need the slow theta bleed on these.

 

[UltradoomY]

I though about selling the same, but I keep thinking if we climb this week (or early next week) those 1400 will be worth a lot more, so I continue to wait and see.

I'm waiting myself as well.
FOMO will probably start Monday morning and lead to faster theta burn and also higher prices. Then again, we might not have any FOMO because of macro.
If that is the case then look out above when the actual beat hits the street because it will be a pile on for a quick rip.

Of course - not advice - my opinion etc.

 

[jeewee3000]

I though about selling the same, but I keep thinking if we climb this week (or early next week) those 1400 will be worth a lot more, so I continue to wait and see.

I was on the fence too, but couldn't ignore the sudden strength this morning upon open. Upon morning pops like these the premiums are inflated for a very short time, so the stock price has to increase from now on for the 1400cc premium to stay the same.

For the 1400ccs premiums to rise from here on out, we must see a serious rally IMO, and I don't see the writing on the wall.

Yes, there can be a buy the rumor leading up to the ER, but it would have to be pretty amazing for the call premiums to be way higher. I just took the money and ran, but there of course might be better opportunities. (That's the name of the game, you are very much aware of this).

To be honest I really hope these cc's get contested, but that would require a never before seen market cap increase of Tesla.



EDIT: afterthought: if we were to revisit $1000 this week I'll probably buy these cc's back in order to resell them next monday morning as @UltradoomY predicts.

 

[tivoboy]

I'm waiting myself as well.
FOMO will probably start Monday morning and lead to faster theta burn and also higher prices. Then again, we might not have any FOMO because of macro.
If that is the case then look out above when the actual beat hits the street because it will be a pile on for a quick rip.

Of course - not advice - my opinion etc.

Computers rarely wait till the more obvious dates. They like to get it over with (if it’s a sell down) or just get on with it, if it’s a melt up of long positional change. Humans wait till there is more light to see the targets, computers just fire in the dark.

 

[TheTalkingMule]

The 1/28 call option premiums seem quite inflated due to the coming earnings report.

Just sold some 1400cc's @1.77 (!). I really don't think this price can be hit by next friday. And if it does, they can take my shares at that price for all I care.

Fun fact, the $1400 strike price is 32% OTM and 12% beyond ATH. IV crush here we come.

EDIT: sold 1/28 1450cc's as well @1.15.

This covers all my shares and leaps, which I rarely do, but I really don't see us getting to $1450 in 9 trading days.

I'm of a similar mind and will be looking to sell CC's on all my shares, perhaps at a more aggressive strike. Cracking $1400 is IMO very possible, but not sustainable. I'll simply buy back when SP is $50 lower.

Yes, those do tend to be famous last words around here, but it feels safe to me. Especially since I can write BPS against the cash in my IRA while I wait to rebuy.

 

[jeewee3000]

Cracking $1400 is IMO very possible, but not sustainable.

Well what are you waiting for? Buy 1/28 1400 calls this instant! /s

I think "very possible" is quite strong wording. I'll go with $1400 is not impossible, but extremely unlikely. Thing is, most ER's where TSLA rallies afterwards, the rally only gets going some trading days after, in this case the week of the 2/4 expiration date.

My reasoning is/was: for $1400 to be hit by 1/28:
- the ER must result in a SP rally;
- the rally must happen withing TWO days;
- the rally must be among the highest ever.

Very unlikely all those boxes are ticked IMO. But you are right I might eat those words later. Keep me accountable!