I bought more stock at open
@Zhelko Dimic Do you usually suggest selling puts so deep in the money (1000)? Honestly never considered it but the return on risk actually looks good compared to getting half the premium for something like an 800. 1000 giving you ~60% higher max return on risk, ~15% lower probability of profit
price at 887
800
TSLA Naked Put (bullish) calculator
1000
TSLA Naked Put (bullish) calculator
I recommend this strategy for light leveraging at quite low risk. This will create 20K-100K at most, for a $1M-$2M portfolio.
Advantage is low risk, "just a bit of extra return" to buy more shares, and very low or no maintenance.
Main con is it would work poorly for 1. someone with itchy fingers, or 2. someone who can't stand volatility.
If you have only shares, and you get nervous when TSLA drops 20-30-40%, this will add just a bit to that stress, so it's person dependent.*
Another danger is that at the end of couple of winning cycles, you feel like you're not optimizing returns for time. This is a dangerous thought, as optimizing returns increases risk; it could be done, as I do do it, but it's best done after one has a serious burn in their history to guide them
With higher leverage, stakes are higher and serious patience and calm is required.
I've run this strategy for years with low leverage, and then leveraging up one way or another when TSLA drops precipitously. At this point I'm close to my max comfortable leverage, so I'd sweat a bit if we were to drop to $600; just in terms of margin call that I need to fend off by buying short term puts. I wouldn't exit positions though.
Otherwise, I couldn't care less. I watched this movie, and I know how it ends...
*(More tax efficient strategy may be buying leaps, or borrowing to buy shares (small quantities!) if everything goes right. However, in that case one doesn't get to sell time-premium, instead it's buying it, or paying interest, so returns are worse when stock doesn't appreciate rapidly. And vice versa, so those two would be higher risk higher risk type of strategy. I see put selling as a more defensive strategy with some, limited upside, and very low risk.)