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Wiki Selling TSLA Options - Be the House

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I could take one for the team…. I guarantee that if I sell 30% of my shares on a pop tomorrow, we will never see under 700 again…. 🤨

I really don’t like the 666 pre market. If you have a way to make the stock never go below 700 ever again, you have to do it. With great power comes great responsibilities;)

is anyone else selling PUT LEAPS? i remember emmett peppers sold some 1000p leaps a while back. i am tempted to sell some leap puts since tesla stock price is so low.

I have tried to do that when in March at a SP around 800 during the recovery phase I sold some -p1050 for July. Should have closed them when I was +50% but there was a lot of time value left. However I didn’t not expect the Twitter induced drop and now they are not doing so well. Might have to buy shitputs in the 100 or the 200s for margin management is the SP drops further.
 
is anyone else selling PUT LEAPS? i remember emmett peppers sold some 1000p leaps a while back. i am tempted to sell some leap puts since tesla stock price is so low.
Do you expect it to stay low in 1-2 years? The June'24 $1000 LEAPs are worth $16.700 a piece and start losing money around $1150. I'd rather buy the 100 shares and you get your $16,700 when the stock crosses $830, which we should easily be able to attain.

Disclosure: I'm on the other side of that trade with the stock below $650 - bull spread, long stock and a call LEAP.
 
Do you expect it to stay low in 1-2 years? The June'24 $1000 LEAPs are worth $16.700 a piece and start losing money around $1150. I'd rather buy the 100 shares and you get your $16,700 when the stock crosses $830, which we should easily be able to attain.

Disclosure: I'm on the other side of that trade with the stock below $650 - bull spread, long stock and a call LEAP.
I don’t think you read that correctly. He’s talking about selling a Put, not selling a Call.
 
I've got a problem -740/640 for this week. One possibility I was thinking of was STC the long put, which is now worth $21, and converting it to a CSP. This will obviously increase the margin, but I have that to spare. My thought is the CSP will be easier to roll/manage. Any downsides I am missing to this idea?
 
I've got a problem -740/640 for this week. One possibility I was thinking of was STC the long put, which is now worth $21, and converting it to a CSP. This will obviously increase the margin, but I have that to spare. My thought is the CSP will be easier to roll/manage. Any downsides I am missing to this idea?
If you have the margin, using the $21 to roll the 740 down as much as possible and out a month could be good.
 
How buying cheap puts to lower your margin works? I used the E-trade margin calculator and it said that if I buy 7x May 27th 400p my margin should go up by $25k and I did that and it did absolutely nothing in the end.


I think buying a 400p is too "low" and not a reasonable price so it doesn't give any margin.
1653313492245.png


Choosing a 500p strike price would give you about $5,000
1653313625805.png
 
Man, 5/27 $500/400 BPS were fetching $2 at the bottom a few minutes ago. Could probably close those out for 50% later today.

If I can ever clear up my ridiculous menu of misguided BPS contracts, I'm just gonna day-trade these positions and keep my goals modest. Even when you're wrong.....they're still ~90% to expire at the week's end. Or you can roll.

This TSLA options market is too crazy to exist. Something needs to happen with it soon. Maybe it'll melt away once Moody's decides to rate out non-existent debt properly.
 
Hi,

What would you suggest as a 101 for a LEAPS newbie?

I couldn't go through the whole thread (almost 1K pages!) so I watched some courses on Free Options Trading Courses | Option Alpha to become familiar with the basics. I was wondering if there's some resources and advice **for dummies** here on TMC about converting shares into LEAPS.

Context: I've HODLed TSLA stocks since '12 (except for a brief in-and-out in early '20). I now have about 5K shares, $2.5M in unrealized gain, a house and no debt. I'm a single 35 y-o with a well-paying job. I've always refrained from touching options/derivatives and never went into margin. I'm tempted to start buying LEAPS given the macro drop but I know very little about options and fear Wall Street always win (I've probably seen too many "max pain" comments in this forum…).
 
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Yeah I just noticed the same thing. Before the market open a 400p was good but not anymore lol. Thanks
Options aren't traded after-hours so Etrade just pulls some semi-random up for prices based on previous sessions trading prices. In this case last Friday's pricing so you have the whole weekend of theta built into some weird number. I wouldnt recommend using their margin analyzer after the normal trading hours.
 
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Hi,

What would you suggest as a 101 for a LEAPS newbie?

I couldn't go through the whole thread (almost 1K pages!) so I watched some courses on Free Options Trading Courses | Option Alpha to become familiar with the basics. I was wondering if there's some resources and advice **for dummies** here on TMC about converting shares into LEAPS.

Context: I've HODLed TSLA stocks since '12 (expect for a brief in and out as Covid in early '20). I now have about 5K shares, $2.5M in unrealized gain, a house and no debt. I'm a single 35 y-o with a well-paying job. I've always refrained from touching options/derivatives and never went into margin. I'm tempted to start buying LEAPS given the macro drop but I know very little about options and fear Wall Street always win (I've probably seen too many "max pain" comments in this forum…).
You've already won. Why try to mess it up?
 
Underperforming NASDAQ on a Green Day, with uptick rule in place is discouraging. I didn’t sell shares yet, but I did sell June 2024 700 strike CC on 18% of my shares for cash/margin for $233, so like selling a few shares for $933. I can always buy them back for what I paid by rolling to 2000 strike to make up the cost difference if things start looking better. Don’t want to do that too soon in case things go down again, because I will lose the bid/ask difference every time, etc..
 
because I trust "The Accountant" EPS forecast, and hope for at least $900 SP by end of 2023? I'd be fine to risk 25% of my gains to profit from this rare drop.

Are you looking for specific strikes for your LEAPS? In general we want to go as far out as possible and as deep as possible to lower the risk and still have leverage work in our favor. I guess this is as good a time to think about buying LEAPS but this is definitely not advice. Let's look at a couple of examples.

Let's assume you have 66K to buy 100 shares based on the current stock price. Instead of buying the 100 shares you could look into buying 2 500C Jun 2024 expiry LEAPS which would cost you the same. They are selling for about 32.5K per call so break even would be about 790$(strike price + premium). The deeper ITM in the money calls you buy the less time premium you pay.

Also you need to factor any taxes you might be required to pay if you have to sell shares to fund your LEAPS.

If TSLA is 900$ at the time of expiry

1. If you bought the shares you would have about 24K in profits
2. If you bought the 500C June 2024 LEAPS you would have about 20K in profits

If TSLA is 1200$ at the time of expiry

1. 54K profits with shares
2. 80K profits with calls

If TSLA is 800$

1. 14K profit with shares
2. 0 profit with calls

if TSLA is 700$

1. 4K profit with shares
2. 25K loss with calls.


So as you can see from the above scenarios there are a lot of risks with options. Please do your own research and see if it makes sense. My numbers could be off as I typed this out quickly but you get the idea.
 
Are you looking for specific strikes for your LEAPS? In general we want to go as far out as possible and as deep as possible to lower the risk and still have leverage work in our favor. I guess this is as good a time to think about buying LEAPS but this is definitely not advice. Let's look at a couple of examples.

Let's assume you have 66K to buy 100 shares based on the current stock price. Instead of buying the 100 shares you could look into buying 2 500C Jun 2024 expiry LEAPS which would cost you the same. They are selling for about 32.5K per call so break even would be about 790$(strike price + premium). The deeper ITM in the money calls you buy the less time premium you pay.

Also you need to factor any taxes you might be required to pay if you have to sell shares to fund your LEAPS.

If TSLA is 900$ at the time of expiry

1. If you bought the shares you would have about 24K in profits
2. If you bought the 500C June 2024 LEAPS you would have about 20K in profits

If TSLA is 1200$ at the time of expiry

1. 54K profits with shares
2. 80K profits with calls

If TSLA is 800$

1. 14K profit with shares
2. 0 profit with calls

if TSLA is 700$

1. 4K profit with shares
2. 25K loss with calls.


So as you can see from the above scenarios there are a lot of risks with options. Please do your own research and see if it makes sense. My numbers could be off as I typed this out quickly but you get the idea.
What about Bull call spread?
 
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Underperforming NASDAQ on a Green Day, with uptick rule in place is discouraging. I didn’t sell shares yet, but I did sell June 2024 700 strike CC on 18% of my shares for cash/margin for $233, so like selling a few shares for $933. I can always buy them back for what I paid by rolling to 2000 strike to make up the cost difference if things start looking better. Don’t want to do that too soon in case things go down again, because I will lose the bid/ask difference every time, etc..

Yes this is what I was worried about when I responded to your post yesterday. It seems to be underperforming. That said I like that it almost retested Friday lows and is gradually climbing upwards. Volume is more than average. Now let's see what the rest of the day looks like and see if we get a follow through tomorrow.