Wiki Selling TSLA Options - Be the House

[Chenkers]

You folks must be making a mint on 8/26 BPS.

Be mindful of possible moves around the split, especially the potential for a sell the news event on the Friday with the split coming into effect on the preceding Wednesday. On the last split, TSLA completed its massive 78.5% run up on the day the split came into effect (31Aug2020) closing at $498.32. It then dropped down to $447.47, -10% 2 days after the split effect date. There's no telling if anything like this will happen this time around as we're unlikely to get a massive run up into the split, so less fuel for a sell-off after.

 

[TheTalkingMule]

Be mindful of possible moves around the split, especially the potential for a sell the news event on the Friday with the split coming into effect on the preceding Wednesday. On the last split, TSLA completed its massive 78.5% run up on the day the split came into effect (31Aug2020) closing at $498.32. It then dropped down to $447.47, -10% 2 days after the split effect date. There's no telling if anything like this will happen this time around as we're unlikely to get a massive run up into the split, so less fuel for a sell-off after.

Yup. My plan is to close these out next Wednesday afternoon as MM's are hopefully planning their pushdown from $980 to $950 Thurs & Fri.

In retrospect, paying even a mild debit to roll these in was likely foolish. I'll be happy if it just works out according to plan.

 

[Yoona]

closed all my CC for this week near the "bottom" around 10:35 ..
lets hope it was the bottom ...

i'll open them up again if we touch 940 today again ..

good timing! RSI went oversold at that time and MACD started to reverse up

perhaps the 908 Low was attempt to steal the 910 stop losses?

 

[Drezil]

good timing! RSI went oversold at that time and MACD started to reverse up

perhaps the 908 Low was attempt to steal the 910 stop losses?

Sometimes i get lucky ^^

A bit of "wisdom" (aka: things i realized & learned):

I had a 900/875 Bull Call Spread. Had a 22.5 closing-order if we spike up. We went down, so i bought the 900c for ~700 credit, turned around and paid 1400 to move the 875 to next week to keep upside, but reduce theta (-2.6 -> -1.6 per day). On the recovery now i STO a 955c against it for 1k.
This is a bet, that MM will keep SP < 950 until friday. If we break above ~975 i can close the 955/875 calendar-spread for a good profit. If we bounce around 975-950 then i let it run & roll out&up on friday. If we gamma-squeeze, then close it is.

One lesson i learned the very hard way. Have a plan, but let the market decide WHICH action (roll, take profit, close, do nothing, etc.) to take depending on price-action.

 

[Max Plaid]

Be mindful of possible moves around the split, especially the potential for a sell the news event on the Friday with the split coming into effect on the preceding Wednesday. On the last split, TSLA completed its massive 78.5% run up on the day the split came into effect (31Aug2020) closing at $498.32. It then dropped down to $447.47, -10% 2 days after the split effect date. There's no telling if anything like this will happen this time around as we're unlikely to get a massive run up into the split, so less fuel for a sell-off after.

I think the last split was totally different insomuch as it was totally unexpected at a time when the stock was heavily shorted, as speculated, likely much of it with naked shorts, hence the massive squeeze and subsequent pull-back, which was partially facilitated by the share offering right after the split

This time they've had most of the year to prepare and be ready, the time-line has been as expected, so less of a mad rise into it and less likelihood of a big pull-back after

But that's all just my opinion, of course

Edit: looks like the big bear defence has failed again today, looking more a more like a bull market incoming (also not advice...)

Edit 2: the 's having another go...

 

[scubastevo80]

Sold 870/770 BPS for this Friday for $3.60. Looking to close or roll these early if we get a sudden move downward. I expect we continue to march higher towards splitsville or in line with Nasdaq turning around midday.

 

[ReddyLeaf]

View attachment 841511

What about the March head fake? It was above a 50% fib level as well. Hmmm, maybe because it wasn’t a “bear” market, just a “correction.”

 

[Max Plaid]

What about the March head fake? It was above a 50% fib level as well. Hmmm, maybe because it wasn’t a “bear” market, just a “correction.”
View attachment 841583

Indeed, the draw-down from the top needs to be a least 19.5%, then the rule kicks-in

 

[EnzoXYZ]

Be mindful of possible moves around the split, especially the potential for a sell the news event on the Friday with the split coming into effect on the preceding Wednesday. On the last split, TSLA completed its massive 78.5% run up on the day the split came into effect (31Aug2020) closing at $498.32. It then dropped down to $447.47, -10% 2 days after the split effect date. There's no telling if anything like this will happen this time around as we're unlikely to get a massive run up into the split, so less fuel for a sell-off after.

Wasn't there a capital raise right after the spilt therefore gave the shorts a way out to find actual shares? If you subscribe to the short squeeze theory due to lack of actual shares then maybe without a capital raise this time there will be a nice rise post split.

 

[UltradoomY]

Today sold all my Bought call adventures from 2 weeks ago -
These were all $1200 strike at different expirations (one buy was 09/23 $1050's) for over 60% profit and some 100%


Took those funds and purchased 1500 shares at $915 this morning.
Definitely excited to have 45 more CC's to sell after next week!

 

[TheTalkingMule]

Wasn't there a capital raise right after the spilt therefore gave the shorts a way out to find actual shares? If you subscribe to the short squeeze theory due to lack of actual shares then maybe without a capital raise this time there will be a nice rise post split.

I think people are correct characterizing the last split as a surprise that triggered a short squeeze. And this time there was plenty of notice AND Elon dumped millions of shares recently, which means it's very unlikely any big MM's are gonna get stuck with a massive naked short they need to reconcile with real shares.

The difference this time around is both the macro and TSLA environment. US macros turned around literally 4 trading days ago, momentum is building rapidly at the precise moment of the split AND a natural loaded spring release for TSLA. We've been held down since right after stellar 1Q earnings and the 3Q earnings are about to blow the roof off this thing. Regardless of a split.

This time around it's a fundamental squeeze that IMO puts TSLA at a 125-150 PE after 3Q and a 120 after 4Q. Tons of big money still needs to get on board. That can cause quite pop. So even at those still unreasonably low PE's that's.......$1320 to $1580 after 3Q and $1650 after 4Q. Or post split $440-550.

From there onward I think we settle into a post-split longterm range of $300(end of days black swan event) to $550(post-4Q peak). Once Energy starts showing some real global traction and/or FSD is done, the next leg can begin.

 

[intelligator]

@Drezil, spectacular timing this morning ! While I don't see us hitting that strike, to lock in credit I bought back the $8 985cc contracts sold yesterday for $3.25. I'll re-load if we get a nice spike tomorrow. Still waiting on good CSP opportunity. Half of me says sell DITM CSP and get shares now, the other says wait after the split to buy more shares. I may pick an in-between to snag more credit meanwhile.

 

[adiggs]

i am curious if anyone intentionally opens near-ATM super wide BPS (that behaves like CSP)

for ex,
8/26 -p900 x2 is 25 credit, total $5000 income, margin 90k
8/26 +p500/-p900 x3 is 25 credit, total $7500 income, margin 112k, spread 400 wide

50% more income for just slightly more margin

"if i am rolling a CSP forever anyway, why not roll a wide BPS instead? the 700 midpoint is 22% OTM"

The forever rolls won't be forever on that +500/-900 put spread. BPS rolls don't behave the same as CSP rolls. They do stay close enough to the same within a narrower bank that you can use CSP logic with them. But the range in which that is true is a LOT smaller than it is for CSP.

My guess in this example is that you're pretty close to CSP down to an $800 share price (1/4th of the spread), but BPS type logic / behavior starts taking over around then.


Then again you can probably roll the BPS keeping the 500 strike insurance and letting the long put change strikes. So roll down the 900 strike to 850 with the share price going down, and have the BPS value stay about the same (the 500 strike is far enough OTM, even at $800, that its cost is ~0).


The value in these really wide BPS is that these can also be traded in a retirement account (in addition to CSP) where margin is not available. That is at least a US thing - I don't know about how that works in Canada. As was pointed out elsewhere in a margin enabled brokerage account the short put will be backed by margin, even if you enter a position that is fully cash secured. Behind the scenes the account will have some amount of margin for backing, rather than the full amount in cash. That amount of margin is quite a bit less than what is needed for the position to be accepted.

In an IRA / retirement account, the full amount of cash needs to be available as margin isn't available.

 

[Yoona]

it is not obvious from the 1-min chart, but 15-min chart shows fight past noon is ~932, which is the:

1) fib 161.8% of today's Low; aka very strong ceiling

View attachment 841285
View attachment 841283

2) 50% retracement from 52-week H/L
View attachment 841291

2 days in a row: ~932 showed up past noon and it's the ceiling

 

[john tanglewoo]

Starting to feel like selling Sept 26 1030 calls was a horrible idea, anyone have any suggestions? Sold them at 17.7

Would those call strikes be divided by 3 post-split? So 1030 becomes 343?

 

[Boomer19]

OCC Tsla Opt adjustment memo for 3:1 split

https://infomemo.theocc.com/infomemos?number=50828

 

[SebastienBonny]

Starting to feel like selling Sept 26 1030 calls was a horrible idea, anyone have any suggestions? Sold them at 17.7

Would those call strikes be divided by 3 post-split? So 1030 becomes 343?

Yes. You’ll end up with 3 contracts with 343,33 strike price.

 

[mongo]

Starting to feel like selling Sept 26 1030 calls was a horrible idea, anyone have any suggestions? Sold them at 17.7

Would those call strikes be divided by 3 post-split? So 1030 becomes 343?

Sept 16th? I will be happy if those are NTM, so you're probably safe?
Yeah, one 1030 contract becomes three 343.33 .

 

[Drezil]

Sept 16th? I will be happy if those are NTM, so you're probably safe?
Yeah, one 1030 contract becomes three 343.33 .

Thats why i rolled up my dec 600c to dec 900c to take profits (only half capital at risk) and not some other number
dec 300 should still be liquid enough after the split

 

[TheTalkingMule]

2 days in a row: ~932 showed up past noon and it's the ceiling

$932 to me is just the logical place for an algo to stand it's ground and protect $950 for Friday. I wouldn't be surprised to see us fiddle around $910-940 all the way through Thursday, despite a clear buying appetite in the marketplace.

My hope is that there's a lot of standard naked shorting done to protect Friday's monthly $950 close and it all unwinds Mon/Tues ahead of the split. Then I can close out my 8/26 BPS on Wednesday afternoon and we all go home happy!