Wiki Selling TSLA Options - Be the House

[JustMe]

My take on TA is that it is essential to know the support and resistance levels to know where to select your next strike price …

Grounding TA in trader psychology:

This is absolutely on point - and it’s important to keep in mind where those support and resistance levels come from to trade on them profitably. These are major buying and selling levels of other traders who are full of greed and fear. For example a resistance level is a price point where lots of buying took place well above the current stock price. Many of those shares were bought by “bag holders” who may be looking to get out of the stock on the next rise so they can get out with minimal loss.

Reading support and resistance levels properly strongly depends on closely following market and company news. Breaking through a support level can be extremely bad if driven by bad news.

Unfortunately this market is hyper sensitive to news and rumors, making swings more dramatic and less predictable. Last weeks Fed interest rate announcement and press conference was a perfect example. So it seems like a risky time to be holding long-term options. It’s a decent time for day trading if you follow basic rules as discussed above.

 

[intelligator]

Hey all, I'm hopping back in to chat about options ? What I thought would outlast the downturn a few weeks back, didn't. I'd rolled several BPS spreads out 6 months from December to Jun '23. They all have a -383.33p short leg that I just now noticed only have .50 extrinsic. At first price top Monday I'll aim for another debit roll to avoid assignment during this lousy period of volatility. Where we sit, 6 months to Jan '24 will add $5, same strikes, 3.13 debit. If I recall right, the trade is less debit when the price comes up some. Nonetheless, I gotta move them... timing could not have been worse; traveling the entire week, pre-market is red. Good luck all.

 

[juanmedina]

Any thoughts about this? Will Q4 be a nothing burger event similar to Q3?

https://twitter.com/x/status/1588548151753203712

I need to start planning on how to position myself option wise.

Futures are red.

Off topic: my father had to buy a truck yesterday because it got totaled and he had to get it financed until he get the money and interest from Toyota was 8.24% for 72 months with the most excellent credit. This is going to hurt car sales bad and hopefully the $7500 EV incentive makes people feel like buying a Tesla is a good deal.

 

[kabin]

Any thoughts about this? Will Q4 be a nothing burger event similar to Q3?

https://twitter.com/x/status/1588548151753203712

I need to start planning on how to position myself option wise.

Futures are red.

Hindsight is 20-20 but some say Tesla's 9% price cut caused increased demand for Tesla as customers canceled their NIO etc contracts. The truth is probably somewhere in between.

 

[BornToFly]

Any thoughts about this? Will Q4 be a nothing burger event similar to Q3?

https://twitter.com/x/status/1588548151753203712

I need to start planning on how to position myself option wise.

Futures are red.

Off topic: my father had to buy a truck yesterday because it got totaled and he had to get it financed until he get the money and interest from Toyota was 8.24% for 72 months with the most excellent credit. This is going to hurt car sales bad and hopefully the $7500 EV incentive makes people feel like buying a Tesla is a good deal.

On twitter someone posted the opposite - that the wait in China is back to the 6 week range. Who knows....

 

[dl003]

It's possible that the entire 5-wave sequence marked by the yellow oval makes up wave 3 of a higher degree 5-wave sequence. Therefore, I'm not so worried about us breaking 198.5 anymore. The normal target for the this *potential* wave 5 is 190, which is the 200 weekly EMA. The COVID crash itself could not break this support. I will be very worried only if we don't get an impulsive bounce off this level when the time comes.

 

[JustMe]

Any thoughts about this? Will Q4 be a nothing burger event similar to Q3?

https://twitter.com/x/status/1588548151753203712

I need to start planning on how to position myself option wise.

Futures are red.

Off topic: my father had to buy a truck yesterday because it got totaled and he had to get it financed until he get the money and interest from Toyota was 8.24% for 72 months with the most excellent credit. This is going to hurt car sales bad and hopefully the $7500 EV incentive makes people feel like buying a Tesla is a good deal.

The message that Tesla does not have a demand problem was loud and clear on the last earnings call. They clearly didn’t want to bring up the planned price cuts in China which were mere days away. Rumors of those cuts contributed to the unexpectedly soft delivery numbers. Problem seems to have been solved. This is not a worry for me at the moment.

Futures are trending less red

 

[Yoona]

The options trader that ignores TA is setting himself up for a beating

agree

it also helps to have a quick handy cheat sheet - determine income based on risk tolerance and current macro condition

for ex: on theoretical 100 contracts, which of the 6 is better for me to sell this week... or maybe i do half/half

 

[Max Plaid]

agree

it also helps to have a quick handy cheat sheet - determine income based on risk tolerance and current macro condition

for ex: on theoretical 100 contracts, which of the 6 is better for me to sell this week... or maybe i do half/half

View attachment 871931

Would you mind sharing that...?

I have to admit to becoming more tempted with writing some ATM calls, but on a green day, up in the 220's. Risk is of course a bear-market rally, but it's hard to see an end to the bear-market right now, looks like doom-and-gloom all the way from here, so limited upside until Q4 P&D methinks

Don't now, tough choices...

 

[jeewee3000]

It's possible that the entire 5-wave sequence marked by the yellow oval makes up wave 3 of a higher degree 5-wave sequence. Therefore, I'm not so worried about us breaking 198.5 anymore. The normal target for the this *potential* wave 5 is 190, which is the 200 weekly EMA. The COVID crash itself could not break this support. I will be very worried only if we don't get an impulsive bounce off this level when the time comes.
View attachment 871902
View attachment 871903

So this would mean we look for a bounce off of 190 first before rallying to say 217-220? If it's wave 5 I mean.

 

[AquaY]

agree

it also helps to have a quick handy cheat sheet - determine income based on risk tolerance and current macro condition

for ex: on theoretical 100 contracts, which of the 6 is better for me to sell this week... or maybe i do half/half

agree

it also helps to have a quick handy cheat sheet - determine income based on risk tolerance and current macro condition

for ex: on theoretical 100 contracts, which of the 6 is better for me to sell this week... or maybe i do half/half

View attachment 871931

Interesting.
The classic Buy-Write is selling OTM covered calls. But you like ATM and ITM
Your choices don'tt fit my risk stratgy for the moment but I would probably choose ATM c210.
Figuring the shares can be called away in a bounce and then when we drop again I'd buy them back.

Nice spread sheet

 

[dl003]

So this would mean we look for a bounce off of 190 first before rallying to say 217-220? If it's wave 5 I mean.

190 would be the ultimate target after this nexr small bounce. After that, no more lower low.

 

[SebastienBonny]

190 would be the ultimate target after this nexr small bounce. After that, no more lower low.

I really hope we won't go any lower. Luckily my margin allows TSLA to go as low as 170.

Would love to see that little bounce today to sell a 230CC for friday at a reasonable premium.

 

[OrthoSurg]

190 would be the ultimate target after this nexr small bounce. After that, no more lower low.

If you are right, my last 6 months of working like crazy will have prevented another margin call.

If we go to Chicken Genius famous 140, I can’t work 24/7 unfortunately to avoir a margin call in my underwater puts

 

[elasalle]

Had to close some of my winning sold PUTS (in other stocks) to keep margins safe ... need to keep monitoring and shuffling/closing as required.
+ ^ was the defensive/pessimistic side of me. The optimistic side of me still added some more Mar 320 calls ...

++ Hawkish Fed means you need to watch your account like a Hawk

 

[jeewee3000]

Thinking of the following strategy to play the upside in the years to come and create some cash margin buffer.

1) Selling 100 shares now ATM (or selling an ATM cc until it triggers)
2 ) with the ~20k USD I sell a JAN2025 $200 put for $56
3) with (part of) the $56 premium I buy a JAN2025 $300 call (currently around $47.5)
4) I'm left over with $20k cash backing the put, 1 sold $200p and 1 bought $300c, and chump change (~.80 per trade, I could do this x many times).

Possible outcomes:

Stock drops -> the cash is backing the csp so I can wait it out. The sold put can be rolled infinitely if I want to. The bought call can expire worthless. (Or I let the put get assigned and I'm back to 100 shares.)

Stock stays flat -> same scenario as above, the put might trigger or not. If it doesn't I made 25% on my cash in 2 years instead of nothing (since SP is flat).

Stock goes up -> put expires and the bought call can be a nice lotto ticket.

Any thoughts on this? Or is this a lot of work for nothing and would HODLING be as safe/risky/lucrative?

(I could pick alternative strikes for the bought call to make it more lotto/create more cash buffer).

 

[bballshinobi]

I really hope we won't go any lower. Luckily my margin allows TSLA to go as low as 170.

Would love to see that little bounce today to sell a 230CC for friday at a reasonable premium.

You need to lower your margin, in my opinion. You are only 15% away from being margin called and forced liquidation.

 

[SebastienBonny]

You need to lower your margin, in my opinion. You are only 15% away from being margin called and forced liquidation.

I know that seems quite low, but:

- I only use margin for long term contracts (in this case a 2025 210 PUT)
- When we go as low as 180 I will sell my current protective put (2025 20 PUT) and buy a higher one
- Lower than 170 is like 500 pre split. I really don't see us getting there

 

[llirk]

Does anyone know of a definitive source for what triggers the wash rule on option positions? For example, if I sell my leaps for early next year at a loss against my gains in 2022, does that mean I cannot buy/sell options in the same account 30 days prior and 30 days after that sale that triggers the loss on my leaps?

Thanks for any non advice you can throw my way. I sense a number of us may be in the same boat...

 

[mongo]

Does anyone know of a definitive source for what triggers the wash rule on option positions? For example, if I sell my leaps for early next year at a loss against my gains in 2022, does that mean I cannot buy/sell options in the same account 30 days prior and 30 days after that sale that triggers the loss on my leaps?

Thanks for any non advice you can throw my way. I sense a number of us may be in the same boat...

Non advice, if they are different strike or different expiration, broker will not apply wash rule to them.

Wash only means you adjust basis on new position instead of claiming loss this tax year. When you eventually close the position, everything evens up (if all in same account).