Exactly those.
My roll was probably more panic than useful, we shall see.
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Wiki Selling TSLA Options - Be the House
- Thread starter adiggs
- Start date
My roll was probably more panic than useful, we shall see.
NOT-ADVICE
But an observation. The way I have consistently gotten myself into trouble is something like this thinking. With shares at such a low price and market sentiment so bearish, I get increasingly wary of the share price going down, and then make up for it somewhat through call sales.
The thing is that there is nearly no chance of a sharp break down from here. Maybe $100 but starting at such a low price that will be hard to come by.
But ask yourself - what sort of news would be needed for a $100 jump up? I don't personally think its likely, but is there more room below or above for a $100 move? $200 move? I can think of several, reasonably likely bits of news, that will trigger a $100+ relief rally. Even if it doesn't stick for long, that can still push cc DITM.
Personally all of my DITM / losing positions have arisen from opening particularly aggressive puts at high share prices, and calls at low share prices.
Conclusion for me - while I continue to have a bearish outlook (as many others) and I see a lot of reasons for the share price to stay low for several months (I'm thinking until Sept right now - last month in Q3), I see my personal biggest RISK to be a sudden break upwards. There is a lot of room to jump back to 1000 quickly, and still only reach the mid point of recent trading (or at least my own view of the recent trading range).
More NOT-ADVICE
I also don't know where the bottom is but I'm planning my next purchase of June '24 500 strike leaps for a share price in the 650ish range. I don't really think we'll get there - I think the combination of the medium term (rest of this year ish) Tesla Story plus the macro story - I see those balancing here in the 700s-800s. Even further down and we start seeing forward 12 month PEs that are low for regular companies, much less such a high growth company with no debt and, I expect, an ability to maintain that growth right through a recession.
Even in such a bearish overall market.
I'm also keeping an eye on June '24 2200 strike calls (almost the max strike available). These are around $50 right now. If these go much lower ($30?) then I'll be doing some speculative call buying. Also the Jan '24 2400 strike calls - these are around $30 right now.
The key to this position is that its so far out - 2 years is an awful big window for the shares to return to say 1000, but the real play here will be good news accumulating in the back half of the year and turning Tesla into the destination investment while the rest of the market is melting down. But that's just me
My real focus is on keeping the income flowing by using much smaller positions and a lot less leverage. My new max leverage is 2x relative to 100% ownership. So as many as 2x put spreads vs. cash secured puts (not margin backed); or 2 max date, DITM calls, to replace 100 shares (and thus sell 2 cc instead of 1). This drops my income a lot, but its still above my actual needs (comfortably).
I see that you are new here, so here’s some friendly “non-advice.” Read through the whole thread from the beginning, watch the learning videos, but most of all learn how to roll your positions out in time and out of the money (OTM) for credit. With the massive drop in the stock price, right now is not the best time to be selling calls, but it can be done judiciously, especially when combined with puts to generate a short straddle or strangle. Also, timing option sales are very critical right now. Finally, most of the pain people are experiencing comes from put spreads (BPS), leverage, and margin. Only highly experienced and risk tolerant people should use those.
Edit: I now see @adiggs also gave you great non-advice. Another general point: Once again we’ve visited $695-700, coinciding with the price at S&P500 addition. This occurs the same week that “news” comes out that the S&P is dropping TSLA from its ES&G list, just one a a huge series of FUD articles. That ES&G list has a bunch of feel-good criteria that is easily gamed such that OIL COMPANIES have a higher rating than TSLA. Coincidence? I don’t think so. Those BASTARDS pushed it down, just like in March, to fix their naked shorts from 18 months ago! Tesla is still rated as pseudo junk bond status so that a huge swath of the investing universe (e.g., pension funds) are unable to buy shares.
Summary: Watch out the bounce is coming, maybe not before Q3, but it’s coming. FWIW, I’m still playing both puts/calls sides and managed to roll out my -p970 & -p1000s for some credit, also rolled out -p750s to next week for credit, and sold some 5/20 -c750s for $5-$6. I’m staying with weekly CCs and CSPs and have never been assigned early, even $200-$300 ITM, probably because they are in IRAs with no margin and not part of a leveraged spread.
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jeewee3000
Active Member
Closed all 5/20 cc's @ 60% profit.
If we spike up tomorrow morning I'll probably try the same day trade of $750's.
If we spike up tomorrow morning I'll probably try the same day trade of $750's.
Sorry, big -5% red day tomorrow, that's the way it has been recently...
Who knows... if we dump I'm selling TSLA -p600's if we pop GOOGL -c2300's, tune in tomorrow kids, for another exciting episode!
i will close everything today; tomorrow is just daytrading
jeewee3000
Active Member
Yeah I wasn't sure to let my calls run (overnight) or not. I'd rather see what the pre-market and open bring before choosing to (re-)enter the market. $700 seems so well defended so I'm thinking getting out of cc's when SP is close to 700 ain't a bad deal. If tomorrow is indeed bloodred, I'll be sitting on my hands.
710 was right!
pre-market was the target all along... perhaps this is MM's hint of tomorrow's Close?
I've honestly no idea what we'll see tomorrow... TBH I think we're due a proper bear-market rally, which hasn't happened yet. I'd be quite OK to have to roll up TSLA calls for a few weeks, would be a novel experience...
With shares so close to 700, I am looking to be flat to up tomorrow. I see pushing the share price below 700, or significantly lower, to be difficult. More and more people will do some math and start seeing TSLA as cheap. I have 675 strike puts open for tomorrow that hope I'm right.
That being said I am also starting to think about buying yet more of the share replacement leaps if we do push significantly below 700. These are the 500 strike on June '24. The strike was previously chosen when I started buying these with shares in the low 900s. I'm choosing to continue buying the same calls, even though at the current share price I would probably be buying the 400 strike.
These purchases, which I view as something I do only on an extreme push down like this, might be around 650 or 600. I am thinking right now that I'll be lowering my current cash % from 30 and 35% down to 10-15% (maybe even a tough lower). I would also be selling those leaps pretty quickly when the shares go back up. Like 800 or something as I prefer being at least 30% cash.
And as quickly as they raised it, they have now dropped the maintenance requirement back to 40%. (I did close out some of my puts today.)
It seems that getting puts assigned causes them to do this even if I resolve the problem the same day before they make the change. (But maybe they review and schedule the changes in the morning to go out after hours. So it is always a day behind.)
(I did close out some of my puts today.) It seems that getting puts assigned causes them to do this even if I resolve the problem the same day before they make the change. (But maybe they review and schedule the changes in the morning to go out after hours. So it is always a day behind.)
Yeah sure sure, but what about more important things like TSLA stock price?
jeewee3000
Active Member
No, I definitely meant "bear-market rally": Bear Market Rally Definition
I find Cory's daily analysis extremely helpful: https://www.youtube.com/channel/UCUP_ao_7-Yct5FcVIA4Kobg
jeewee3000
Active Member
Thanks. Didn't know the term, but I do know of a dead cat bounce and it's the same apparently.
In other news: pre-market is up nicely because of the Chinese lowering the 5 year rates in order to boost the economy, so I'm very glad I got out my cc's yesterday.
Will probably daytrade cc's again. Still doubting the strike price. $750 seems close to the money if we open around $730. Maybe $770's.
I’m obviously happy that the markets are green in pre-market. I wish TSLA was up 2-4X so that we don’t go that much lower if the market reverses again. The China interest rate news might give the rally staying power. 
I have a few spreads expiring today. I can’t risk opening next week until Monday or Tuesday when I have a better sense of where we are going.
I have a few spreads expiring today. I can’t risk opening next week until Monday or Tuesday when I have a better sense of where we are going.I’m obviously happy that the markets are green in pre-market. I wish TSLA was up 2-4X so that we don’t go that much lower if the market reverses again. The China interest rate news might give the rally staying power.
Yeah we have not recovered at all on this drop meanwhile Rivian and Lucid are up +12% in two days vs Tesla at 2% so far.
Funny… but please let’s not let this become like the other thread
Good luck trading today, folks.
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