Wiki Selling TSLA Options - Be the House

[samppa]

Plans for the next few years:
Back to work
Accumulate more TSLA but to a broker that does not offer options, these will become core shares
Keep the IBKR account as a trading account, sell ccs/csp 1-4 dte and -20%/+20% off atm

No need for risk because no need for income when working

I am in my early forties, so will still have plenty of time to retire.. also my kids just started primary school, so I'm sort of tied up here anyway.. may as well work for a few years.

 

[vikings123]

Edit: after some more thoughts, my problem with trading options is I'm really averse to taking a loss. I try to avoid it till the very end, try to pull rescue moves etc.. this works until it doesn't, and then when it doesn't the loss has multiplied.

Sorry to hear about your situation. As TSLA bulls, inherently, we are always optimistic about the SP recovery. I learned my lessons early and quite frankly don’t like the idea of a roll. I have had some negative months but overall I survived.

And I think the main reason for that is taking losses and live to fight another battle. That plus having enough margin cushion helped me keep my account from getting liquidated.

The other thing that really helped me was to take a recurring monthly withdrawal from my trading account as “salary”. This is important because now you have a different mindset.

I am in my early forties, so will still have plenty of time to retire.. also my kids just started primary school, so I'm sort of tied up here anyway.. may as well work for a few years.

. Good luck with everything.

 

[OrthoSurg]

I had been flying pretty close to the maintenance margin - too close - and now they suddenly liquidated a bunch. Somehow the algo decided that those protective puts I had bought were not enough anymore..

Pretty much the whole year down the drain.

Well at least I'm not broke.

I'm going back to work and taking a break from options.

Edit: after some more thoughts, my problem with trading options is I'm really averse to taking a loss. I try to avoid it till the very end, try to pull rescue moves etc.. this works until it doesn't, and then when it doesn't the loss has multiplied.

The good thing about having underwater puts that are -50% from the actual stock price is that they force you to work harder to get that money to buy those shares in couple years of roll if the stock price never recovers. It’s almost motivating to me. My colleague is working like crazy to pay his 1.2M downtown house mortage and his 1.6M country house mortgage. I am working harder to cover my 1.8M TSLA shares have to buy out once I get assigned my puts if the stock decides to never recover in the next 5-7 years. I feel better now that even with all the front runner seller who sold in anticipation of Elon selling we didn’t breach 200 or the old 600 pre-split. This give me more and more confidence I won’t get margin called.

Sorry to hear it happened to you. Good luck building back wealth progressively.

 

[Chenkers]

I'm not sure how many in this thread currently follow the daily Money Time Machine videos on Youtube. I've been following his videos lately and I find he provides an extremely good overview of the technical trading, macro situation, key indicators, manipulations, upcoming triggers and potential moves. Looking back over the past weeks he's been able to make pretty accurate predictions of how the overall market has moved and why. While someone like Cory provides a good overview of technicals for recent trading, I find Money Time Machine gives a much better and broader overview of the macro situation.

So if you haven't watched before I recommend going back over recent videos to get a feel for what he's saying and consider adding it to your regular watch list. He does have a paid investing group but I'm not a part of that or have any other involvement other than appreciating the information provided.

 

[JustMe]

Actually, selling BPS above the CC (or CC below the CSP) and using the proceeds to raise/lower the strike price works far faster.

yes of course but greater rewards carry greater risks. What I suggested is very low risk of loss.

Here’s an example of how what you suggest could lead to serious trouble.

Sell CC at $220. Short squeeze or news rockets the share price to $350 in two weeks. Panic sets in - your shares are trapped “forever”. So you sell 320/300 bps to help raise your CCs. Elon tweets something ridiculous or bad news hits and TSLA falls to $270 in a a week. Now your bps can only be rolled for debit, you’re in margin trouble and your CCs don’t generate enough cast to buy back your bps. This is not far off from my experience.

DITM CCs won’t get you margin calls or wipe you out, but multiple forum members have been wiped out by overextending on bps and underestimating how far the share price can drop.

So just be careful

 

[JustMe]

JustMe is advocating selling covered calls to help facilitate this roll. But 11/11 -275c are selling for only $0.50, so only the 12/16 -276.67 roll would be viable for a net credit.

That’s the opposite of what I advocated

 

[Oil4AsphaultOnly]

That’s the opposite of what I advocated

So with the 11/04 -280p situation that I put up. What were you suggesting?

 

[Oil4AsphaultOnly]

yes of course but greater rewards carry greater risks. What I suggested is very low risk of loss.

Here’s an example of how what you suggest could lead to serious trouble.

Sell CC at $220. Short squeeze or news rockets the share price to $350 in two weeks. Panic sets in - your shares are trapped “forever”. So you sell 320/300 bps to help raise your CCs. Elon tweets something ridiculous or bad news hits and TSLA falls to $270 in a a week. Now your bps can only be rolled for debit, you’re in margin trouble and your CCs don’t generate enough cast to buy back your bps. This is not far off from my experience.

DITM CCs won’t get you margin calls or wipe you out, but multiple forum members have been wiped out by overextending on bps and underestimating how far the share price can drop.

So just be careful

Yes, that is the problem with this method. So have to be judicious about its use.

 

[JustMe]

So with the 11/04 -280p situation that I put up. What were you suggesting?

I actually didn’t offer a suggestion to your situation, I was responding to someone else.

However, if I had that situation, I would probably roll to January and close on the next rise. We may have a market rally heading into midterms or you could hold out to the next P&D report which should be a solid beat.

 

[ZsoZso]

I'm the proud owner of another 800 shares of TSLA -- but not so proud of the $300 price I paid for them

Got assigned Nov.4th PUTs.
The good news is, I only have 12 more contracts of ITM PUTs, rolled them to Nov.18, not that it provides any protection...

 

[Right_Said_Fred]

Over the last few weeks my deep ITM puts kept being exercised early. Until now my strategy was selling the shares again and reopening the positions, but every few days the shares would be assigned again. So I’ve decided to keep them all (2k) and start writing calls. But I need to make sure the calls are far enough OTM to not lose the shares for less than I paid for them.

I guess you could say I’m doing The Wheel. Kinda.

I’m still short 40 puts at 240 and 250.

 

[ReddyLeaf]

I'm not sure how many in this thread currently follow the daily Money Time Machine videos on Youtube. I've been following his videos lately and I find he provides an extremely good overview of the technical trading, macro situation, key indicators, manipulations, upcoming triggers and potential moves. Looking back over the past weeks he's been able to make pretty accurate predictions of how the overall market has moved and why. While someone like Cory provides a good overview of technicals for recent trading, I find Money Time Machine gives a much better and broader overview of the macro situation.

So if you haven't watched before I recommend going back over recent videos to get a feel for what he's saying and consider adding it to your regular watch list. He does have a paid investing group but I'm not a part of that or have any other involvement other than appreciating the information provided.

Thanks. Seriously helpful insight into Friday’s market manipulation. Market-wide snakes, and here I thought it was just simply TSLA options needing to close near $215. Definitely worth the time. I hope @Papafox and @Artful Dodger take notice.

 

[BornToFly]

I just watch the Money Time Machine video posted above. It seems very good. I subscribed to his YouTube channel to see what he posts next week.

I did sell some shares on Friday at around 212 in case we drop on Monday. I will sell more if we are dropping Monday and try to buy them back cheaper (or at the selling price with a Buy Stop Loss Limit order).

 

[chiller]

Something strange happened: Over night i got way more excess liquidity with IBKR .. they must have changed something in their margin calculations like a tweak to their "concentration penalty" or so.

just FYI ..

Hey @Drezil,
Haven't seen you post anything since this. Is everything okay?
I'm also with IBKR, and did not get more liquidity at that time, so I assume something had happened to your account? Did you get assigned some shares?

 

[BornToFly]

I'm thinking of trying to trade smarter by hedging like the MMs. Sell 205 Puts and 220CC. If the SP gets to 205, sell current shares to get assigned the Puts. Buy the shares back if SP starts to climb before expiration. And for the calls, by shares in the 220-222 range, and sell the shares if the SP starts to drop below the strike again. Obviously may lose a little money if I have to sell/buy shares several times and the timing isn't great, but will have the original premium to play with. This will require time at the computer, but I'm doing that anyway these days.... Hopefully better than playing the wheel where you may get assigned shares on the Puts, and the SP keeps dropping so much you can't sell good CCs, and after several cycles you have lots of ITM shares and no cash left.

 

[AquaY]

I'm the proud owner of another 800 shares of TSLA -- but not so proud of the $300 price I paid for them

Got assigned Nov.4th PUTs.
The good news is, I only have 12 more contracts of ITM PUTs, rolled them to Nov.18, not that it provides any protection...

Pay attention to extrinsic value as an indicator of early assignment

 

[OrthoSurg]

Over the last few weeks my deep ITM puts kept being exercised early. Until now my strategy was selling the shares again and reopening the positions, but every few days the shares would be assigned again. So I’ve decided to keep them all (2k) and start writing calls. But I need to make sure the calls are far enough OTM to not lose the shares for less than I paid for them.

I guess you could say I’m doing The Wheel. Kinda.

I’m still short 40 puts at 240 and 250.

I wanted to do that when I got 15 contracts exerciced twice but the problem is that there was an impact on margin and the interest was significant to pay. So sold the shares and sold the contracts but 12 months out instead of 3 months.

How many DTE left on the contracts you got assigned?

 

[Singuy]

I'm not sure how many in this thread currently follow the daily Money Time Machine videos on Youtube. I've been following his videos lately and I find he provides an extremely good overview of the technical trading, macro situation, key indicators, manipulations, upcoming triggers and potential moves. Looking back over the past weeks he's been able to make pretty accurate predictions of how the overall market has moved and why. While someone like Cory provides a good overview of technicals for recent trading, I find Money Time Machine gives a much better and broader overview of the macro situation.

So if you haven't watched before I recommend going back over recent videos to get a feel for what he's saying and consider adding it to your regular watch list. He does have a paid investing group but I'm not a part of that or have any other involvement other than appreciating the information provided.

Yup I have watched a few of this guy's video. I think his TA is even more convincing than Cory's with very good reasoning behind everything. Boy it's scary listening to his predictions tho..lol.

 

[AquaY]

Yup I have watched a few of this guy's video. I think his TA is even more convincing than Cory's with very good reasoning behind everything. Boy it's scary listening to his predictions tho..lol.

Listening to this it seems if you have shorts this week you could be totally screwed

 

[Singuy]

Listening to this it seems if you have shorts this week you could be totally screwed

I don't think so. Seems like he is predicting a cluster F after earnings and the Feds meeting. He was predicting a next leg lower for the final bottom last weekend.