Wiki Selling TSLA Options - Be the House

[SebastienBonny]

Sold 250 CC for next week on monday for 3.07.
Meanwhile lowering cost base of 100 shares by adding some at current levels and converting some previously bought, more expensive shares, to long ones. At 270ish now, rolling from 250 to 270 if needed is doable.

 

[vikings123]

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

I'm waiting for at least a semblance of a green day but the selling is relentless lol or it is being held back for some reason. I'm expecting to see at least a couple of days of run up into earnings, no big deal if we don't.

 

[elasalle]

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....

the market has a habit of doing the opposite of what we think it will do cheers!!

 

[strago13]

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!

Took this advice and just rolled an extra 2 weeks out for a small credit

 

[Yoona]

wait, what

only tsla is green?

YESSSSS

 

[adiggs]

Took this advice and just rolled an extra 2 weeks out for a small credit

I learned this from my own experience awhile back when share price dropped from ATH 900s back into the 600s. I got stuck with 760 strike puts (started at 820) that I was rolling week to week for nearly no credit, and no strike improvement. I kept up with the "this week is different" thing and 5 months later I still had 760 strike puts.

If I'd been rolling for strike improvement and 1 month at a time I'd have had those down to 740 or 730 over those 5 months and probably had a good enough close show up to wash my hands of the position. Instead I used 1 and 2 week rolls and stretched the whole mess out at least another month.

My ah-hah - if I'm DITM, then just accept that. One option is to eat the loss, even though I know the shares will come back eventually. The other choice is just accept that I'm working with monthlies. I don't want to go out a year or 2 which I've done in the past. But the credit gains out to ~3 months are pretty good. A bonus of a 6-12 week option is that there isn't much day to day monitoring required

 

[intelligator]

Get the aging meter out ... my rookie call for Thursday is green by way of a wishful close at 222.75 to pull us out of the -.02 ditch we are left in. It's been five days or more that we are negative, gotta be oversold, just gotta. Gamma flip is 218 , LET'S GO !

 

[OrthoSurg]

Just went out with an anesthesiologist who is retiring at 47 to day trade Forex full time and according to all his Forex indicators that he overlaps with the stock market he concluded the actual crash was 100% manufactured by market makers and when he overlaps his technicals analysis of Forex and stock he is calling for a reversal on November 2th and start of the next bull run.

At least he is making 15% weekly with Forex and been doubling his initial investment every 5 weeks. That’s the only credibility he has. I wanted to cheer you up. Don’t give up everyone!

 

[Max Plaid]

Bit of a long post before I go to work (going to work being moving to my office, which is another room in the house...)

I too got spooked with the markets, the FUD and all the rest

After months of well-disciplined trading and constant gains, I'm left holding a large bag of $294 cost-basis TSLA (less ~$35 accumulated call premiums), got too complacent and sure that the split + Q3 P&D would ignite the stock so went 75% into stock pre-split at $900, ouch! Also got left with some -p280's, which had already been rolled a few times

Spent most of Tuesday night awake running through different scenarios on how to mitigate further market downside, but not wanting to sell the shares with 25% losses, I prefer to keep them if possible and then sell weeklies going forwards

Too many ideas to lay them all out here, but what I came up with was to sell December 17th -c190's against all the shares, which nets $40 per contract, closed out the -p280's to get them off my back

Pros: downside protection to $190, boosts cash-balance, extrinsic $13 at time of sale, profitable as long as SP <$230 on expiry
Cons: gains capped at $230, no protection below $190 (note if calls did expire with SP <190, then 190 becomes the new baseline going forwards)

TBH, the share-price could go anywhere from here, 150, 350, I have zero idea. I'm sure a LOT of the recent selling has been shorting, any kind of rally could produce a massive squeeze, conversely, and this is what scares me, anything type of lower guidance or feeling that demand is being affected by the economic situation, we could dump further - it's the idea of this that I want to protect against the most, I'm also very wary of Musk selling after ER to fund Twitter

Going forwards I have absolute confidence Tesla will be fine - even if demand for higher-price EV's wains, they have plenty of scope for price-cuts, and cheaper models to bring to market, Cybertruck will be amazing and once we see Semis actually being delivered and on the roads, will boost things even more

Also looking to sell a few safe weekly puts from here, not sure how to define "safe", but around 200 feels like a good risk/reward on the basis that assignment for a BW at those prices would be OK

Will it all work-out, no idea, but at least I'm not too worried about the idea of TSLA dropping lower from here

 

[SebastienBonny]

Puts things into perspective: Unusual Option Activity in Tesla: Bears Hit it Big - TheStreet
It's not like you place such "bets" if you don't know "something".

 

[saniflash]

Puts things into perspective: Unusual Option Activity in Tesla: Bears Hit it Big - TheStreet
It's not like you place such "bets" if you don't know "something".

I would love to fully agree but the problem with the options flow is that we don't know the bigger context, i.e.

• who made the purchase -- potentially it was an MM algo delta or gamma hedging
• was it bought or sold
• was it part of a larger combination -- e.g. did someone roll another position (granted, in this case a roll is rather unlikely, as the risk is pretty high with so little DTE)
• hindsight bias -- how many other transactions are there in the options flow every day that have a similar profile or exposure and that ultimately expire worthless, or not with such a spectacular payoff? The author selected a few winning transactions out of 1,000s. Not sure how representative that is. I.e., the signal-to-noise ratio may be very high.

 

[OrthoSurg]

Bit of a long post before I go to work (going to work being moving to my office, which is another room in the house...)

I too got spooked with the markets, the FUD and all the rest

After months of well-disciplined trading and constant gains, I'm left holding a large bag of $294 cost-basis TSLA (less ~$35 accumulated call premiums), got too complacent and sure that the split + Q3 P&D would ignite the stock so went 75% into stock pre-split at $900, ouch! Also got left with some -p280's, which had already been rolled a few times

Spent most of Tuesday night awake running through different scenarios on how to mitigate further market downside, but not wanting to sell the shares with 25% losses, I prefer to keep them if possible and then sell weeklies going forwards

Too many ideas to lay them all out here, but what I came up with was to sell December 17th -c190's against all the shares, which nets $40 per contract, closed out the -p280's to get them off my back

Pros: downside protection to $190, boosts cash-balance, extrinsic $13 at time of sale, profitable as long as SP <$230 on expiry
Cons: gains capped at $230, no protection below $190 (note if calls did expire with SP <190, then 190 becomes the new baseline going forwards)

TBH, the share-price could go anywhere from here, 150, 350, I have zero idea. I'm sure a LOT of the recent selling has been shorting, any kind of rally could produce a massive squeeze, conversely, and this is what scares me, anything type of lower guidance or feeling that demand is being affected by the economic situation, we could dump further - it's the idea of this that I want to protect against the most, I'm also very wary of Musk selling after ER to fund Twitter

Going forwards I have absolute confidence Tesla will be fine - even if demand for higher-price EV's wains, they have plenty of scope for price-cuts, and cheaper models to bring to market, Cybertruck will be amazing and once we see Semis actually being delivered and on the roads, will boost things even more

Also looking to sell a few safe weekly puts from here, not sure how to define "safe", but around 200 feels like a good risk/reward on the basis that assignment for a BW at those prices would be OK

Will it all work-out, no idea, but at least I'm not too worried about the idea of TSLA dropping lower from here

One one hand the stock is so oversold it is due for a relief rally. On the other hand, the trend is your friend and we are in a downward trend. At this point, it is really flipping a coin.

My plan was to sell CC for next week with a strike price of 250. Don’t know if I should select closer strike price and have more downward protection but I feel every time I become bearish there is a counter trend relief rally happening.

 

[juanmedina]

Last time it took a little less than 2 months to go from low $200's to $300's hopefully this will happen again. I bought some puts for the first time a few days ago and I will add more if we get a relief rally. Just selling calls is not enough protection. Good luck to everyone some of the post here make me feel like we are close to the bottom.

 

[Max Plaid]

One one hand the stock is so oversold it is due for a relief rally. On the other hand, the trend is your friend and we are in a downward trend. At this point, it is really flipping a coin.

My plan was to sell CC for next week with a strike price of 250. Don’t know if I should select closer strike price and have more downward protection but I feel every time I become bearish there is a counter trend relief rally happening.

Well we are mostly Tesla bulls here, some of us Uber-bulls, so if we start feeling bearish then you can be sure the wider market is even more so

And from what I gather, once you get to a certain level of bearishness, and everyone have bought puts as a result, then Wall Street crooks will manufacture a rally to wipe them all out...

Plus the short is a crowded trade down here, somewhat saturated, risky to add to that position

 

[BornToFly]

Down about 4% in pre-market. Can it really go much lower during trading today? Trying to decide if I sell more shares today for margin protection....

 

[elasalle]

trying to time the market to sell CCs turned out to be a bad choice.
Wish I had just stayed on script and sold those yearly CC's when we were above $300. Was thinking too much on Q3 delivery report and Q3 cc. Who knows maybe the opportunity presents itself after earnings next week.(+ at slightly lower strike)

We might find support around 210 and 200(previous 600) ...else all the way down to the 180s they say

 

[JustMe]

Down about 4% in pre-market. Can it really go much lower during trading today? Trying to decide if I sell more shares today for margin protection....

I don’t know where the bottom is but we’ve had days with 8-10 % down.

If it looks like we’re heading further down, consider buying long dated puts or selling in the money CCs.

Picking the bottom is hard and can be costly.

Good luck everyone

 

[BrownOuttaSpec]

Well guys, we did it, We hit our new 52 week low of $206.24

 

[ice]

Rolled the 10/21 -240c (-720c pre split) $56.10 (SP around $290.78) to 12/18 -250c (-750c pre split) $58.78 (SP around $290.99) on the dip.

$10 strike improvement, $2.68 credit

well in hindsight I shouldn't have rolled the 10/21 -240c to 12/16 -250c...probably could have closed the position which I have been rolling for 5 months (originally sold as 5/27 -600c), and resell on spikes (initial + roll credits around $17). but the 12/18 -250c isn't doing too bad and offered me somewhat limited downside protection with that $17.

my regret is I took a massive loss buying back DITM 8/19 $750c (buy back at $180/contract) when the stock was in the $900s and 8/19 $750c (buy back at $150/contract), I got spooked on the way up and thought it would go to $1200 pre split. The talks of inflation easing, fed taper ending, the bottom is in, this is not a bear market rally, split, Q3 etc etc. Had I not bought them back because of FOMO, I would have unlimited downside protection all the way down to $0. so I had margin call threshould at $400 pre split ($133 post split), then no margin call worries , got FOMO, and now back to $500 pre split ($166 post split) margin call threshould. Thank god I kept the 12/16 -250c, or I would be margin called already (Prob in the $700s pre split range) I was willing to let the 12/16 -250c go only because I took delivery of a model Y LR AWD (Finally after a 10 month wait), and it's at 6.3% interest. Was thinking the CC premiums even while rolling DITM could exceed 6.3% + 8% margin interest + capital gains tax, and worst case I would be assigned, and just pay off the car and some margin but looks like that wasn't the worst case, the worst case was the stock going down and me getting martin called, not missed gains

 

[OrthoSurg]

Sold 232.5 CC at 0.89 yesterday and BTC them for 0.11 at market open

This downfall has to stop