Wiki Selling TSLA Options - Be the House

[mongo]

I need advice. I don't know what to do. I have so many ITM BPSs that I will run into serious margin trouble if the SP keeps dropping.

Option 1) Selling enough shares to take the full loss on all of them and just be done. This will leave me with 1/3 of the shares I had at the beginning of the year, and forever limit my upside potential. This will affect my lifestyle and eliminate any possibility of the massive charitable contributions I wanted to do later in life.

Option 2) Sell just enough shares for a little more margin cushion, and pray we don't go much lower, and we recover by Jan 2024. Riskier, but life goals may survive. However, if we do go lower, I will have to sell even more shares than in #1 and be even worse off than I would be with Option 1.

P.S. - What is really making me mad, is that I know as soon as I'm fully destroyed, the stock will climb just like we have all expected it to do for months.

Edit: Taxable account, so I will get wrecked on taxes selling lots of shares too....

Non advice
Can you convert some shares to long puts to cover yourself on the downside?
Ideally, they will expire worthless, but give you some insurance/ margin improvement.
Depending on sentiment, you could use bear put spreads to reduce their cost.
JAN 23, +200p is $20 10:1 put to share ratio, selling 100 shares protects 10 contracts/1000 shares
JAN 23, +200p/-150p gets you $50 of buffer for $14

 

[Chenkers]

Well I thought I'd made it through yesterday but just now got assigned 24 x Jun'23 383.33 across 2 accounts out of a total 50 x 383.33/416.67BPS.

The 14 in the cash account I will early exercise but I expect to trade the shares/puts of 10 in the margin account shortly after open to narrow the loss. I'd already shuffled around 30 of these yesterday to safer expiries so will deal with the rest tonight.

Update on this. I was trying to sell the assigned shares and P+ after market open but missed the early peak to sell shares. Selling the first P+ during the MMD was going to cause a huge margin shortfall so I ended just exercising the P+. Ideal approach today would have been to sell shares during premarket and sell P+ in the MMD. Would have been around around $6k better outcome.

 

[OrthoSurg]

I need advice. I don't know what to do. I have so many ITM BPSs that I will run into serious margin trouble if the SP keeps dropping.

Option 1) Selling enough shares to take the full loss on all of them and just be done. This will leave me with 1/3 of the shares I had at the beginning of the year, and forever limit my upside potential. This will affect my lifestyle and eliminate any possibility of the massive charitable contributions I wanted to do later in life.

Option 2) Sell just enough shares for a little more margin cushion, and pray we don't go much lower, and we recover by Jan 2024. Riskier, but life goals may survive. However, if we do go lower, I will have to sell even more shares than in #1 and be even worse off than I would be with Option 1.

P.S. - What is really making me mad, is that I know as soon as I'm fully destroyed, the stock will climb just like we have all expected it to do for months.

Edit: Taxable account, so I will get wrecked on taxes selling lots of shares too....

The mistake I did in late February was to close all my 35 underwater put contracts at a -300% loss when I was margin called. The stock recovered from 700 to 1150 within 1 month.

Now my strategy is to close 1 contract at a time to free up margin because when I get close to margin call is because the stock is about to recover.

My rationale is that the massive bear raid with massive shorting can’t stay forever and my premise is that the SP will recover.

However, I understand with BPS you can’t free up margin by closing them one at a time like naked puts but if you can sell shares progressively to cover for margin when the SP falls I think that would be the best way to survive the storm if it recovers. Well that’s what I should have done in retrospect in March instead of closing at a loss and losing 50% of my shares.

If the SP really goes to 140 like Chicken Genius is calling, then I’m losing another 50% of my shares.

 

[OrthoSurg]

Just Sold 232.5 CC against all my shares for this Friday because I want this f&$?&ing stock to recover for once.

Can we have one of those magic +10% days like we had in 2020.

I dare the MMs to make me roll my calls

 

[BornToFly]

The mistake I did in late February was to close all my 35 underwater put contracts at a -300% loss when I was margin called. The stock recovered from 700 to 1150 within 1 month.

Now my strategy is to close 1 contract at a time to free up margin because when I get close to margin call is because the stock is about to recover.

My rationale is that the massive bear raid with massive shorting can’t stay forever and my premise is that the SP will recover.

However, I understand with BPS you can’t free up margin by closing them one at a time like naked puts but if you can sell shares progressively to cover for margin when the SP falls I think that would be the best way to survive the storm if it recovers. Well that’s what I should have done in retrospect in March instead of closing at a loss and losing 50% of my shares.

If the SP really goes to 140 like Chicken Genius is calling, then I’m losing another 50% of my shares.

Closing BPSs at full loss doesn't really help with margin. So I can only sell shares, which sucks to do as the SP is dropping more and more. I sold 10,000 shares this morning to give me Margin down to a little below SP 200. Now the stock can rip higher and leave my cash behind....

 

[BornToFly]

I worry that CPI will be spun as bad tomorrow morning and the SP will drop no matter what. I'm trying to make myself wait until Monday to buy back any shares I sold....

 

[OrthoSurg]

I worry that CPI will be spun as bad tomorrow morning and the SP will drop no matter what. I'm trying to make myself wait until Monday to buy back any shares I sold....

I am at the point I feel like selling my whole position and buy OTM puts at 150 10 DTE. This means the SP will recover really soon. Last time I had that feeling was mid June

 

[BornToFly]

Non advice
Can you convert some shares to long puts to cover yourself on the downside?
Ideally, they will expire worthless, but give you some insurance/ margin improvement.
Depending on sentiment, you could use bear put spreads to reduce their cost.
JAN 23, +200p is $20 10:1 put to share ratio, selling 100 shares protects 10 contracts/1000 shares
JAN 23, +200p/-150p gets you $50 of buffer for $14

What is strange is that when I put either option into the Margin Calculator in Fidelity, my Margin Available actually goes down because of the money spend buying the Puts....

 

[chiller]

What is strange is that when I put either option into the Margin Calculator in Fidelity, my Margin Available actually goes down because of the money spend buying the Puts....

Can you make them into a calendar spread? As in, move the short leg out in time, while keeping the long leg where it is at.
This will only work until the short leg expires, but will bring in some cash now.

 

[mongo]

What is strange is that when I put either option into the Margin Calculator in Fidelity, my Margin Available actually goes down because of the money spend buying the Puts....

Yes, for margin available at the current price. It helps once the SP is below the new put strike.

 

[scubastevo80]

Bought Jan 2025 $200 LEAPs @ $87.50 with spare cash this morning. If the stock drops below $200, I'm likely to convert half of my shares to LEAPs. Valuation is now at a point where its too cheap to ignore, coupled with oversold indicators flashing "buy" (RSI of 25 today).

 

[OrthoSurg]

Bought Jan 2025 $200 LEAPs @ $87.50 with spare cash this morning. If the stock drops below $200, I'm likely to convert half of my shares to LEAPs. Valuation is now at a point where its too cheap to ignore, coupled with oversold indicators flashing "buy" (RSI of 25 today).

My margin is overextended with an oversold stock

 

[strago13]

Minor problems compared to @BornToFly , but I have 10/21 285 CSP's, cost basis is $274, which I can roll for a slight credit and strike increase (290) to Nov 4th. I think I would prefer to stay cash right now given the way the market is...So what options do I have?

1. Roll to Nov 4th and increase strike to 290 for slight improvement in extrinsic value
2. #YOLO and get assigned shares since I have no value left (this could happen at any moment)
   1. HODL shares and pray for recovery so I can sell CC
   2. Sell shares on open and resell the same contracts? This option doesn't make sense to me
3. ??????

TIA

 

[scubastevo80]

My cash is left over from when I sold 1/3 of my $133.33 EXP 06/21/24 on 9/20 at $198.50 when the stock was $305ish. In hindsight, I wish I would have liquidated more.

 

[Yoona]

https://twitter.com/x/status/1580243398006640642

 

[samppa]

Minor problems compared to @BornToFly , but I have 10/21 285 CSP's, cost basis is $274, which I can roll for a slight credit and strike increase (290) to Nov 4th. I think I would prefer to stay cash right now given the way the market is...So what options do I have?

1. Roll to Nov 4th and increase strike to 290 for slight improvement in extrinsic value
2. #YOLO and get assigned shares since I have no value left (this could happen at any moment)
   1. HODL shares and pray for recovery so I can sell CC
   2. Sell shares on open and resell the same contracts? This option doesn't make sense to me
3. ??????

TIA

Roll further out, far enough that you can improvr to lower strike?

 

[adiggs]

Minor problems compared to @BornToFly , but I have 10/21 285 CSP's, cost basis is $274, which I can roll for a slight credit and strike increase (290) to Nov 4th. I think I would prefer to stay cash right now given the way the market is...So what options do I have?

1. Roll to Nov 4th and increase strike to 290 for slight improvement in extrinsic value
2. #YOLO and get assigned shares since I have no value left (this could happen at any moment)
   1. HODL shares and pray for recovery so I can sell CC
   2. Sell shares on open and resell the same contracts? This option doesn't make sense to me
3. ??????

TIA

not-advice

Something similar - I have 275 puts that I rolled out to the Nov monthly a week or so ago. Their time value is down to $1-2 now from $6 when I rolled (keeping the strike flat). Assuming the same share price in another week or so when time value is more like .50, I'll keep the strike (almost certainly) and roll at least 1 month - maybe 2 months to Jan monthly.

My Nov monthly choice was mostly driven by a desire to get more time so there would be enough time value in the roll (about $1/week). The next roll won't be so affected by how close to expiration I am. I would rather not be rolling 1-2 months at a time, but with CSP and $1/week credits that I've been getting so far, I'm entirely fine with that.

The Jan monthly is a particular target looking for the earnings and production to get us moving back in the right direction, and for me to be nearing expiration about that time. The Dec. monthly will also be a good choice.

What I won't do while DITM is roll week to week, or even 2 weeks at a time.


Of course I would rather that cash wasn't already committed - the 230 strike puts I took assignment on Friday make for great wheel / buy-write shares. I wish I had a lot more of those, but ... duh!

 

[juanmedina]

Call premiums are decent for next week IMO. A $255 18% OTM is paying $1.2-1.15. I may sell a few contracts here and wait for the CPI tomorrow hoping that is good report so I can sell more.

 

[UltradoomY]

Call premiums are decent for next week IMO. A $255 18% OTM is paying $1.2-1.15. I may sell a few contracts here and wait for the CPI tomorrow hoping that is good report so I can sell more.

IV is high next week because of earnings

 

[juanmedina]

IV is high next week because of earnings

Yes I always like the earnings play because of the IV crush.