Wiki Selling TSLA Options - Be the House

[adiggs]

I am happy I closed my 8/7 765CCs 2 days ago for 85% profit.

My 15/7 800CCs are dark red.
I will wait for next week to see what happens before rolling them

The former is an important reason that I take early profits on a significant move. I've been in too many trades where a good opportunity like that turned into a nightmare, even when it eventually worked out, to risk the stomach acid. And besides the early close freed up those shares - you're in a great position today to open a replacement position!

 

[Knightshade]

Thanks to the just-now dip I was able to roll my -750ccs for today to next Friday at 800 for $3.20 credit, reasonably ok with this

 

[adiggs]

I liked where I woke up this morning and how things have played out with my buy-write positions.

I had originally purchased shares at 703 and entered today with 700 strike calls written against them for $13. Those had about $3 worth of time value remaining and the best part, I knew that I would finish earning as much of that $13 as I wanted today, regardless of how far and what direction the shares moved.

With the shares going up I finally closed for 699.80 (I could get the final .20 by letting them go to expiration - I don't like going to expiration though) but finally closed with shares around 750. That price marks a ~$3 loss on the share purchase; I was paid $13 for the privilege for an overall net of $10 over the last week.

This particular buy-write I had separated the two events, looking for a price rise like today's for a simple share sale. That rise timing was wrong for me so I've missed out on the ~$50 I might have earned had the timing been better, but no regrets. I still had an excellent week of earnings, the optionality was free, and I'll keep looking for similar good setups in the future. Maybe a big drop on Monday will open up a another shot

WIth those buy-write positions closed I'm around 60% shares and leaps, 40% cash, one of them encumbered should we head for the moon leading into or coming out of the earnings call.


This being such a strong up day, that makes it a bad time to open new buy writes. I'll be looking for regression on Monday to open replacement positions.

 

[EnzoXYZ]

All fun comes to an end it seems- Hawaii trip was amazing. There was definitely a ton of Teslas out there. Seems like a no brainer with such limited drive distance and horrible traffic on O’ahu. The Honolulu Tesla store in an ultra luxury mall I visited was empty with no cars- good signs.

Been years since I had to continuously drive an ICE car/minivan. Boy was it the worse experience you can have. I counted no less than 5 times I left the keys in the ignition and unlocked doors. Part of the mountainous roads we went on I wished we had an EV. Instant acceleration and regenerative braking is under rated.

It was a good decision not to have much trades the past week as we got busy and the time difference made things complicated. Unless I plan on having very OTM positions I wouldn’t have any positions open again next time.

My usual BPS for next week hasn’t been opened since we are up today and missed the opening drop as I was taking my daughter to swim practice. Thought about some 850CCs but didn’t pull the trigger yet.

 

[CHGolferJim]

Rolling the 730 yesterday would have been the better move. At 762, the same 740 for 7/15 is now 6.05 ... another note to add to my pad I may instead consider 7/22 760 for 11

EDIT: Also looks like price is hitting the 760 resistance, improving the credit on the 5-6 DTE, VWAP flattening as well.

Maybe, the credit as of 12:50pm at ~$750 is still about $11, and there appears to be a chance of finishing below $730. Most likely I’ll watch the tape until 2pm and roll if flat trend continues — since my broker is busy this afternoon, I don’t have online access, and I don’t want assignment at $730.

Edit: Never mind, with the spurt 1:00-1:30, I rolled from 7/8 to 7/15 both at $730 as sort of dared to by @Max Plaid —-> $15.11 credit.

 

[Max Plaid]

I liked where I woke up this morning and how things have played out with my buy-write positions.

I had originally purchased shares at 703 and entered today with 700 strike calls written against them for $13. Those had about $3 worth of time value remaining and the best part, I knew that I would finish earning as much of that $13 as I wanted today, regardless of how far and what direction the shares moved.

With the shares going up I finally closed for 699.80 (I could get the final .20 by letting them go to expiration - I don't like going to expiration though) but finally closed with shares around 750. That price marks a ~$3 loss on the share purchase; I was paid $13 for the privilege for an overall net of $10 over the last week.

This particular buy-write I had separated the two events, looking for a price rise like today's for a simple share sale. That rise timing was wrong for me so I've missed out on the ~$50 I might have earned had the timing been better, but no regrets. I still had an excellent week of earnings, the optionality was free, and I'll keep looking for similar good setups in the future. Maybe a big drop on Monday will open up a another shot

WIth those buy-write positions closed I'm around 60% shares and leaps, 40% cash, one of them encumbered should we head for the moon leading into or coming out of the earnings call.


This being such a strong up day, that makes it a bad time to open new buy writes. I'll be looking for regression on Monday to open replacement positions.

Why didn't you roll them to next week at the same strike??

I had 10x -p700's assign on Monday from expiry last week +$10 initial premium and wrote -c700's for this week +$15 = +$25

I had originally decided to let them expire, but yesterday saw there was a +$11 roll at the same -c700 strike for next week, so I took that = +$36 net

In fact it seems sensible to me, to just keep rolling at the same strike while there's decent premium available, if the SP comes back down and puts them OTM, then that's an added bonus

Key to this is to accepting the shares to be called-away at the original 700 strike, it's when you want to hold onto them and start looking for free-roll/strike improvements, that's when it all goes bad

I was looking today to straddle them with 10x -p700's and with the red pre-market had my sights set on $20, but that got scuppered. Have left that order sitting there for the moment, but will take $10 if it comes later in the day...

 

[adiggs]

Why didn't you roll them to next week at the same strike??

I had 10x -p700's assign on Monday from expiry last week +$10 initial premium and wrote -c700's for this week +$15 = +$25

I had originally decided to let them expire, but yesterday saw there was a +$11 roll at the same -c700 strike for next week, so I took that = +$36 net

In fact it seems sensible to me, to just keep rolling at the same strike while there's decent premium available, if the SP comes back down and puts them OTM, then that's an added bonus

Key to this is to accepting the shares to be called-away at the original 700 strike, it's when you want to hold onto them and start looking for free-roll/strike improvements, that's when it all goes bad

I was looking today to straddle them with 10x -p700's and with the red pre-market had my sights set on $20, but that got scuppered. Have left that order sitting there for the moment, but will take $10 if it comes later in the day...

A few reasons.

The first is that I entered this buy-write with a csp mentality (that's how I think of it anyway). I'd reached a max profit from the position so trying to keep it alive didn't make sense to me, and my csp trading rule is to close on a big move up such as we've seen today.

The roll, or an immediate close / open of a new buy-write would be functionally the same but with a shorter string of transactions going together to represent the entire position.

Mostly - it set me up for a regression and new buy-write open on Monday. The 700 strike cc for next week is carrying around $7-8 in extrinsic value right now. If shares drop to 720 or 730 on Monday that same cc might carry $15 worth of time value. The logic is the same as for csp. Of course the shares can keep going up - this is always a possibility, but my larger trading rules are to open new cash secured puts / buy-write positions on a down move and close on an up move.


I also consider your notion of continuing to roll at the same strike as long as there is a good premium available to be an entirely reasonable, even desirable approach. Especially when the strike and share purchase prices are especially low relative to recent trading. The risk is a big move down that pushes the ITM call strike into an OTM strike.

 

[adiggs]

Comments on my decision making approach / strategy.

I make heavy use of a decision making strategy called satisficing. I was so happy when I discovered that it had a name

The idea with satisficing is to proceed with a decision when some acceptability threshold is met. For the option sales, I worry more about whether a position is good / adequate, than whether it is optimal. Most of the time optimal is mostly focused on peaks and valleys in the share price, and optimizing for financial results.

The trading rules I've built up around this idea do a good job of keeping me on the better side of the ups and downs and from my personal experience, are adequate for my needs.

The way I think of satisficing is its a decision making strategy that incorporates all the other stuff that is part of a decision, but doesn't necessarily get considered. In the context of my option sales strategy this includes:
- stomach acid / can I sleep at night
- can I check in on the share price a few times a day, or do I need to be watching it more closely than that.
- are positions, at least to some degree, fire and forget?
- time invested in the overall process each week (this is a gotcha for me and doing my own technical analysis)

The big one is whether I'm reaching my income target. Generally speaking I am measuring progress on a weekly basis, but due to week to week variation and even month to month variation, I measure success at the quarterly level. Q2 found me right in the middle of my income target for the quarter, with 2 months going above and 1 month going noticeably below. There will still be quarterly variation - it'll just be much smaller.

As long as I'm consistently hitting the income target then further optimization for financial outcome has a reasonably strong likelihood of exposing me to more risk than I want to take on.

This is an important reason, for me, to have an income target and to use it appropriately. For me that means that I don't want to be stretching to get to it - doing so is an indicator that I am taking on too much risk and/or don't have adequate capital available to reach the income.

It also means that if I'm going over the top of the income target (range) that I might be taking on more risk than I really want to be taking on. That's a trigger to evaluate my week to week choices / trades / strategy, as well as leverage, to see if I'm getting greedy. It is entirely possible that I'm ok on risk and leverage and just doing particularly well

 

[juanmedina]

Maybe another green day? I have 770-780cc

https://twitter.com/x/status/1545346941650968577

Well that was no fun. Survived another. To the next one .

 

[ice]

STO 7/15 750C $8.80 (SP around $700) to replace the 7/1 750C. I may sell more if the SP keeps rising to replace the 7/1 770C.

I stuck to my rule to not open anything unless share price pops above $700, so couldn't open any trades yesterday, by the time it did pop above $700, there aren't anything good for me to sell for 7/8, unless I'm willing to sell the 7/8 $730c for $3. which I may have to close and roll if the share price goes up further, so instead of doing that, I'm taking it easy and just selling next week's 750c for 1.4 weeks of premium. This position has accumulated roughly $30 of credits, which if assigned means i'm selling shares at $780, not bad.

So I did STO 7/8 -750c yesterday at $2.02 as the SP went further north of $700 (SP around $723.22). bad timing, did not expect it to breach $750. with the spike today I BTC 7/8 -750c for $9.7 STO 7/15 -770c for $17.78 (SP around $755.06) for a $20 strike improvement and $8 credit. I'm slightly annoyed at my broker because after I BTC the 7/8 750c, their system would not let me STO the 7/15 770c without waiting for an approval, with a message saying I don't have enough shares for it to STO in that account. this made the spread for the roll worse as I could have STO the 770c for close to $20 while I was waiting for that approval (took 5 minutes), and the BTC timing was bad too as it was $7-8 but the market order filled it at $9.7. I could have gotten a $12 credit instead of $8. oh well, a $20 strike improvement and $8 credit isn't too bad for waiting an extra week to potentially let the shares go.

Leaving the 7/15 -750C, and 9/16 -700C's alone for now

 

[adiggs]

Changed my mind and sold cc against longer term leaps and shares. The 850 cc for next week were good for $2 - not as much as I'd like but also about as low of a strike for these cc's as I would accept. Plan for management is to roll them aggressively to avoid assignment as needed. I would like to be earning more like $4 per week but these haven't been earning anything for more than a month, so a little bit back in the game is welcome.

Also planning to have these cc's closed for earnings - just in case earnings is the trigger for a big rally I want the covering calls out of the way.

 

[intelligator]

Maybe, the credit as of 12:50pm at ~$750 is still about $11, and there appears to be a chance of finishing below $730. Most likely I’ll watch the tape until 2pm and roll if flat trend continues — since my broker is busy this afternoon, I don’t have online access, and I don’t want assignment at $730.

Edit: Never mind, with the spurt 1:00-1:30, I rolled from 7/8 to 7/15 both at $730 as sort of dared to by @Max Plaid —-> $15.11 credit.

This and your morning trades, you nailed them well My 7/8 -730C rolled to 7/15 -740C for $6.5 when price was at $760. Of course, after I bought there was a dip to $747. It is credit nonetheless. 7/8 -660 CSP are expiring worthless, yay! Let's see what next week brings.

 

[Max Plaid]

A few reasons.

The first is that I entered this buy-write with a csp mentality (that's how I think of it anyway). I'd reached a max profit from the position so trying to keep it alive didn't make sense to me, and my csp trading rule is to close on a big move up such as we've seen today.

The roll, or an immediate close / open of a new buy-write would be functionally the same but with a shorter string of transactions going together to represent the entire position.

Mostly - it set me up for a regression and new buy-write open on Monday. The 700 strike cc for next week is carrying around $7-8 in extrinsic value right now. If shares drop to 720 or 730 on Monday that same cc might carry $15 worth of time value. The logic is the same as for csp. Of course the shares can keep going up - this is always a possibility, but my larger trading rules are to open new cash secured puts / buy-write positions on a down move and close on an up move.


I also consider your notion of continuing to roll at the same strike as long as there is a good premium available to be an entirely reasonable, even desirable approach. Especially when the strike and share purchase prices are especially low relative to recent trading. The risk is a big move down that pushes the ITM call strike into an OTM strike.

I think it's moot whether you allow the existing position to expire or roll at the same strike - yes if you roll, can be the SP dumps and it goes against you, but that can happen five minutes after you open the next buy/write, so I don't consider that a factor

One thing that does influence for me is that on share buy/sells there a government tax of 0.35%, capped at €1600, and in the case of assignments a broker fee of 0.3% - on a typical 10x $TSLA 700 strike position I'll pay ~$3800, but rolling the options costs $25

 

[juanmedina]

Wonderful news:

https://twitter.com/x/status/1545518148174192640

 

[EVWatcher]

Wonderful news:

https://twitter.com/x/status/1545518148174192640

Not for my first ever attempt to sell covered calls into the weekend lol

 

[BornToFly]

I had a buy/write for today that I didn't roll. Last Friday I bought shares at 678 and sold 640CC for $13 extrinsic. I was looking at rolling them to 700CC for next week, but the value was only $6-7 on the extrinsic. So I decided to let the shares go and I will see if there is a drop Monday for a new Buy/Write that gives closer to $10 extrinsic for a strike at least $30 below the buy share price (to protect in case the SP drops during the week). I have found that the Buy/Write works well for me when the SP is low and I'm low on Margin, because it is a nearly risk free trade that doesn't increase my margin requirement as the SP drops the way BPSs do, and I don't believe the SP can drop too far below my strike price (so selling more calls against the shares will remain profitable). With the SP higher I have a lot more margin, I can open more BPS and BCS spreads, so next week I should be able to get my target income for the week and stay 20% OTM on the BCS side. I think on the BPS side -600 is safe (which is 20% OTM currently, but if the SP drops to 700 I will still use 600).

 

[bkp_duke]

TWTR news came out at about 78 minutes after market close.

I wonder if the share price rise after hours will result in any call/puts being exercised.

 

[BornToFly]

TWTR news came out at about 78 minutes after market close.

I wonder if the share price rise after hours will result in any call/puts being exercised.

Holy Crap. I just looked at the AH again. I have a lot of 780 calls I didn't close because we were so far below that level at 2pm!

They were 0.01 at close. I logged in just to see if I could close them, and it says they are expired and not tradeable.

 

[CHGolferJim]

Holy Crap. I just looked at the AH again. I have a lot of 780 calls I didn't close because we were so far below that level at 2pm!

They were 0.01 at close. I logged in just to see if I could close them, and it says they are expired and not tradeable.

Oh man, I wouldn't have thought of a possible bounce from Twitter going kaput either; I do try to allow extra margin for unpredictable Friday closing crosses. Monday could be big, and the rest of the week flat/down. We'll see how much of the alleged overhang returns to SP. Guess there will be news about litigation over the breakup fee, fortunately it seems Elon has the cash, if needed.

 

[BornToFly]

Oh man, I wouldn't have thought of a possible bounce from Twitter going kaput either; I do try to allow extra margin for unpredictable Friday closing crosses. Monday could be big, and the rest of the week flat/down. We'll see how much of the alleged overhang returns to SP. Guess there will be news about litigation over the breakup fee, fortunately it seems Elon has the cash, if needed.

Yeah, I thought more than a 3% buffer would have been safe! It would generate a HUGE tax bill (around $2.3 Million). I have 120 contracts.