Wiki Selling TSLA Options - Be the House

[WattsHappening]

Two other ways to look at it:

1. On the other side of that trade is a Call Buyer who thinks that SP will increase by more than $15 between now and 6/17. Who is more likely to be right?

2. If you close now and invest .. say buy 2/3 back of your shares after taking the loss. By 6/17 will shares gain you make more or less than rolling CC?
I think it would only take SP gain of ~$25 to make more.

Yep, agreed. That's what I've considered and why I originally was leaning towards letting the calls get exercised.

As we've seen over the past 3 months, it's a crap shoot in the short term as to whether the SP goes up or down. I'm good with hedging my holdings a bit longer by rolling the CCs. Worst case (for the CCs) is the SP continues to rise. I'm good with that as my CCs are just on a fraction of my shares. But given the run-up we've had the last two weeks, I could also see P&D being a sell-the-news event, in which case I'm glad I rolled my CCs.

 

[sonofjorel]

Just to answer myself BTW- ended up rolling on this little dip-- was able to roll to $1150 strike for 4/29 at $2/sh net credit.

I realized even if it was ITM at that point, I'd still have the option to roll in the LEAP at that point and still likely collect all/nearly all of the time value since it wouldn't burn off much at all by then, and I'd also get to collect an extra $105/share on the higher strike.

Q1 earnings will be that week or the week prior. IV for those will likely rise after Tesla announces the ER date in the next couple weeks or so and the date nears. Not sure how much difference that will make or if it factored in your thinking but just wanted to put it out there.

 

[Yoona]

TSLA RSI

View attachment 787887

Relative strength index ( RSI ) | Option Trading Guide

Apologies for the misleading screenshot (screen was too tight to show true height). Below is the correct one. TSLA is now overbought (surpassing even the "Q4 results" frenzy last Jan).

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eresearch.fidelity.com

"If Tesla trades sideways or pulls back slightly over the coming days it could settle into a bull flag pattern. If a bull flag is formed as part of a consolidation pullback, the measured move would be 47%, which indicates Tesla could trade up into blue skies above the $1,600 level in the future.

A pull back would also help to cool Tesla's relative strength index (RSI), which is measuring in at about 73%. When a stock's RSI reaches or exceeds the 70% level, it becomes overbought, which can be a sell signal for technical traders."

 

[BrownOuttaSpec]

I did my first options trade today since that huge January downturn that caught me (us?) off guard and had to roll my BPS out to Nov to avoid max loss

But made $20.00 today buying and selling a 1x 4/8 $1550 call.

 

[BornToFly]

Will be interesting to see if we get a buy the rumor climb tomorrow or Friday in anticipation of the P&D over the weekend. Could 1200 be in the cards by Friday close? With two days until Expiry, my last BCSs will be for 1250/1400 on a good pop tomorrow.

 

[Knightshade]

Q1 earnings will be that week or the week prior. IV for those will likely rise after Tesla announces the ER date in the next couple weeks or so and the date nears. Not sure how much difference that will make or if it factored in your thinking but just wanted to put it out there.

It definitely factored in- post earnings sell off is what I was considering, and likely why it was a lot better roll (as far as improving strike without debit) compared to even a week earlier

 

[JustMe]

I did my first options trade today since that huge January downturn that caught me (us?) off guard and had to roll my BPS out to Nov to avoid max loss

But made $20.00 today buying and selling a 1x 4/8 $1550 call.

Green is green, man

 

[dc_h]

My 4 month ordeal with 950-850 BPS is finally over. I moved these BPS week to week and then finally 6 weeks out in February. I lost money and opportunity. I haven't done the math, but lost about 10 points of the 100 spread. Sometimes when you are in deep, you have to push it out more than a few weeks. The stock will follow our long term expectations, but it won't do it every week.
I'll look forward to a little extra cash flow being able to put the money to work again. Selling covered calls after the big run up, way out of the money 1200, 1300 and 1375 for decent premiums. Traveling next week and will avoid anything over the weekend. Could be missing a good opportunity to harvest volatility before deliveries are announced.

 

[Yoona]

daytrading... 40% in one hour, closing it this afternoon

 

[lukex4]

First time ever selling CC this week (Monday): 10x 4/1 $1300 @ $2. A relatively easy $2000...

I plan to quit my job soon so I'm looking for new ways to generate money. So far so good!

 

[BornToFly]

First time ever selling CC this week (Monday): 10x 4/1 $1300 @ $2. A relatively easy $2000...

I plan to quit my job soon so I'm looking for new ways to generate money. So far so good!

Nice. Stick to the safe stuff. I thought I was coming out of retirement with the drop in February....

 

[MP3Mike]

The volume chart for today makes it look like they are targetting a 1090 close for the week:

But the 1100 call wall looks too low to me, so the close is likely to be closer to 1150. not-an-advise....

 

[adiggs]

Closed my 4/1 1200 strike calls this morning. They were at 90% (.50 out of $5 or 6) and I wanted to go into the weekend with no covered calls open (check). I closed today because there was little absolute value remaining to earn, as well as wanting to clear those out in case the share price goes on a tear and hits 1200 later today or tomorrow (a low but non-zero chance IMO as people position for P/D).

Now I'm debating the sale of shares and purchased calls I need to make in the next week or 3. Do I sell today / tomorrow prior to P/D? I lose exposure to the possibility of a big spike, while taking the risk of a sell-the-news reaction to P/D off the table.


NOT-ADVICE
With this big decision before me, I find that typing it out is also helping me think it through. And since I'm in this for dividend like income, selling now with the shares around $1100 is a really good price for me - certainly compared to a couple of weeks ago where I would have needed a strong positive P/D reaction to get into this position.

I'll sit with it a few more hours but I think those shares and purchased calls are getting sold today. That will be the last bit of leverage being cleared out and it'll raise the lump sum I need.

 

[BornToFly]

SP might get pinned around 1100. Trying a small strangle for fun. -1065/-1130 for tomorrow. $8.80. Stop loss order for each leg at $8. Can lose $7.20 if it swings hard in each direction and takes out both stop losses. Don't know if I should change the stop losses to $6, hoping that if one triggers, I can close the "winning" leg for $2 and walk away unscathed?

 

[Oil4AsphaultOnly]

First time ever selling CC this week (Monday): 10x 4/1 $1300 @ $2. A relatively easy $2000...

I plan to quit my job soon so I'm looking for new ways to generate money. So far so good!

Nice. Just a reminder that no matter how confident you become, always leave yourself an exit route (available margin, unused covered call, or at least a willingness to roll out to LEAPs), just in case Hertz announces another large order.

 

[BornToFly]

SP might get pinned around 1100. Trying a small strangle for fun. -1065/-1130 for tomorrow. $8.80. Stop loss order for each leg at $8. Can lose $7.20 if it swings hard in each direction and takes out both stop losses. Don't know if I should change the stop losses to $6, hoping that if one triggers, I can close the "winning" leg for $2 and walk away unscathed?

Decided to add +1030 and +1160 to make IC for $2.60. Now I hope that if my stop losses get triggered on the short legs, that the long legs will get the original premium of the short legs back and limit the total possible loss.

 

[lukex4]

Nice. Just a reminder that no matter how confident you become, always leave yourself an exit route (available margin, unused covered call, or at least a willingness to roll out to LEAPs), just in case Hertz announces another large order.

Sadly no real exit route possible that I know of.. My account is an RSP (kinda like your IRA) and no margin is allowed for these in Canada. Also it seems my broker (TD) doesn't allow me to trade LEAPS (or I didn't see how/where to do so).

My only exit is selling way OTM calls that if they ever get executed, I'll be fine with the cash and will see for an entry point to buy backs the shares.

 

[EnzoXYZ]

Theorem?: Tesla stock can go higher than you think or go lower than you think.

I got caught twice last year: 3/05/21 and Hertz epic run.
3/5/21- sold too many CSP and had 700 shares on margin to sell calls. It’s gravy until there is bigger price movement.
Hertz: ~ 2nd week of doing ‘sure money’ BCS I believe 20% OTM. Wow TSLA can move more than I thought possible! Probably won’t ever do BCS again?
I believe my total losses were close to 400K-500K between those two events.
I clawed back all of my losses for last year using most of the strategies discussed here. Happy I’ll be paying a little 2021 tax. By not breaking my rules the last two big events (Elon’s sale and War) did not get me in trouble.

Last two weeks it’s all been CCs and zero BPS as we haven’t got a sell on strength day.

Looking to sell some BPS today or tomorrow to play the P&D volatility crush. I rather be safe and make less therefore looking for low 900s (~-15%) and 1/4 of my usual quantity. Will add more if we have a drop. Unlike many I don’t see why you must max out or do nothing for this binary event.

 

[scubastevo80]

RSI was at

Theorem?: Tesla stock can go higher than you think or go lower than you think.

I got caught twice last year: 3/05/21 and Hertz epic run.
3/5/21- sold too many CSP and had 700 shares on margin to sell calls. It’s gravy until there is bigger price movement.
Hertz: ~ 2nd week of doing ‘sure money’ BCS I believe 20% OTM. Wow TSLA can move more than I thought possible! Probably won’t ever do BCS again?
I believe my total losses were close to 400K-500K between those two events.
I clawed back all of my losses for last year using most of the strategies discussed here. Happy I’ll be paying a little 2021 tax. By not breaking my rules the last two big events (Elon’s sale and War) did not get me in trouble.

Last two weeks it’s all been CCs and zero BPS as we haven’t got a sell on strength day.

Looking to sell some BPS today or tomorrow to play the P&D volatility crush. I rather be safe and make less therefore looking for low 900s (~-15%) and 1/4 of my usual quantity. Will add more if we have a drop. Unlike many I don’t see why you must max out or do nothing for this binary event.

Thanks Enzo - we're also thinking about two trades for tomorrow. Given I feel like most of the market's negative macro news is priced in, I'm reluctant to bet against the stock going higher. I know the last few P&D events have led to a
1. BPS ~20% out for 4/8
2. Debit call spread +1200/-1300 that we'd probably close Monday either way. Unlikely to do this one given the recent run up.

 

[CHGolferJim]

Closed my 4/1 1200 strike calls this morning. They were at 90% (.50 out of $5 or 6) and I wanted to go into the weekend with no covered calls open (check). I closed today because there was little absolute value remaining to earn, as well as wanting to clear those out in case the share price goes on a tear and hits 1200 later today or tomorrow (a low but non-zero chance IMO as people position for P/D).

Now I'm debating the sale of shares and purchased calls I need to make in the next week or 3. Do I sell today / tomorrow prior to P/D? I lose exposure to the possibility of a big spike, while taking the risk of a sell-the-news reaction to P/D off the table.


NOT-ADVICE
With this big decision before me, I find that typing it out is also helping me think it through. And since I'm in this for dividend like income, selling now with the shares around $1100 is a really good price for me - certainly compared to a couple of weeks ago where I would have needed a strong positive P/D reaction to get into this position.

I'll sit with it a few more hours but I think those shares and purchased calls are getting sold today. That will be the last bit of leverage being cleared out and it'll raise the lump sum I need.

Interesting situation. I think if I was in the same boat, I’d probably take half the exposure off the table (primarily from the leveraged part) and leave half for Monday. It would depend on what the alternatives and timings are for raising the remainder of the lump sum needed. I’m starting to think it’s 50/50 whether P&D will impact SP. On the one hand, WS is bringing down their consensus production projection re Shanghai closure (reported by G. Black), but we know that will have limited impact on deliveries. So the chances of a down day are reasonably significant.

I’m considering a BTC on 6 DITM 5/20 calls on Friday hoping for a strong chance of a price bump Monday AM —> resell/roll for better terms than doing both Friday. This would worked beautifully in recent weeks, but I was chicken. I’m just not that confident of enough of a beat to impact SP. Perhaps a Friday downtrend could impact the decision.