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Wiki Selling TSLA Options - Be the House
- Thread starter adiggs
- Start date
Does anyone know the answer to what protects the account better from a margin perspective to a further 10-20% drop in the SP? Sell shares and hold cash, or sell CC on the same number of shares I would be selling to buy ATM protective puts?
AquaY
Member
True or not I think there are many that believe it is or can be true and that effects pricing
No. $Millions, and I mean $Millions of dollars are being spent on OTM TSLA puts. It is being shorted very hard via Put buying and sellers of the Puts have to sell TSLA shares to Hedge. It is literally being squeezed down.
bballshinobi
Member
Just be safe man. This market is only gonna get crazier. With how high and fast TSLA went up the past two years, there’s no telling how fast and low we can dip.
Volume is VERY HEAVY.
QQQs are at a third of average. TSLA is at 70% of average and still cooking.
Margin liquidations on a mass scale could be the answer in combination with bear raid. Or investors woke up and realized the PE is over 50 and they should run for the hills due to bear market. Or there is a whale selling hard.
Frustrating to see a flat market and the fastest growing mega tech getting taken to the woodshed simultaneously. Fear what the price action could be for TSLA if macro markets go ugly again.
Let's hang in there best we can. I liquidated 1K shares as well this AM around 200. Will regret severely two years from now. But don't want margin account blown up.
Have a feeling if selling pressure stops that we could end up the day only marginally down. Would make sense that it would at some point...
QQQs are at a third of average. TSLA is at 70% of average and still cooking.
Margin liquidations on a mass scale could be the answer in combination with bear raid. Or investors woke up and realized the PE is over 50 and they should run for the hills due to bear market. Or there is a whale selling hard.
Frustrating to see a flat market and the fastest growing mega tech getting taken to the woodshed simultaneously. Fear what the price action could be for TSLA if macro markets go ugly again.
Let's hang in there best we can. I liquidated 1K shares as well this AM around 200. Will regret severely two years from now. But don't want margin account blown up.
Have a feeling if selling pressure stops that we could end up the day only marginally down. Would make sense that it would at some point...
The advantage to selling 220 strike calls and buying 200 strike Puts, is that when the market recovers, while I won’t be able to sell the Puts to buy back the calls anymore, I would be able to sell the puts to roll the calls from a 220 strike to maybe a 300 strike without losing any money Or shares.
If I sell shares now, and buy back in with the stock at 230, i loose money or share number, but don’t have a cap on the SP. I can also wait longer than 2024…
Any advice?
Volume has tapered off and SP is trending up.
Bought 20 11/11 205 calls at 4.75 to offset the shares I sold for at least this week. Would be nice if they printed. Looking to dump 1/2 at profit today. Think recovery to 206 or so would do it nicely.
Wishful thinking! Most probably I will get spanked.
Has gotten ugly in the time it took me to type this.
Bought 20 11/11 205 calls at 4.75 to offset the shares I sold for at least this week. Would be nice if they printed. Looking to dump 1/2 at profit today. Think recovery to 206 or so would do it nicely.
Wishful thinking! Most probably I will get spanked.
Has gotten ugly in the time it took me to type this.
Could it be half of the investors on margin buying protective puts to hedge?
john tanglewoo
2012 Roadster Owner
Probably a little of everything. It’s a perfect storm of negativity right now, the good news is that very little of which has to do with the fundamentals of Tesla the company.
Sounds great if they are cash secured.
NASDAQ 5% above 52 week low. We are at 52 week low. We usually drop 4X Macro. Not good.
What I’ve learned this year is that company fundamentals don’t mean a thing. Clearly we can go much lower. If CPI is bad this week I don’t know what will happen.
What I’ve learned this year is that company fundamentals don’t mean a thing. Clearly we can go much lower. If CPI is bad this week I don’t know what will happen.
unsure if it helps, but my plan to yearend and onwards is to keep it really simple
- continue to maintain all-cash account, not planning to HODL regardless of how rosy a quarter-end picture is; this means no TSLA shares unless it's needed for temporary B/W
- continue ITM B/W to increase the chance of losing temporary B/W shares
- continue CSP/wheel
- gradually shift half of account to SPY options: i am sick of perpetual TSLA overhang and the man-crush is over
- continue with TSLA daytrading; i am only aiming for $1/day after MMD is done - i only need a piece of the action, not the whole Hi-Lo range
- no spreads/straddles/strangles - anything that needs babysitting on a losing side
- no LEAPS (i don't understand it enough)
- invest in subscriptions/education (TrendSpider, Market Mayhem, Dan Shapiro, Cheddar Flow, Game of Trades, Spot Gamma, TradingWarz, etc)
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Sorry, the only thing I can think of is level 1 account trades like covered calls and debit spreads have no margin requirement. Otherwise lightening the load on short puts should help right the ship.
The CBOE use to have an option margin calculator but I couldn't find it.
Naked Call Margin Calculation
Naked Put Margin Calculation
It's sometimes best to assume the worst when dealing with option margin. If there was a Murphy's law on option margin it would say something like 'expect a painful call only at the SP's absolute bottom.'
Yeah, well, I'm not writing YOLO ATM calls down here, want the SP >225 for that, then it's an possibility
I don't get the drop, it's based on, well, nothing, unlike AAPL which was clearly affected by the iPhone guidance warning in pre-market, but has pretty much recovered - so real material information doesn't seem to matter, sentiment and manipulation wins the day!
Anyway, don't panic, I setup a small 5x 11/11 -p/-c200 straddle for $7.44/$7.1 and bought 500x TSLA @$198 on one of the dips to cover the short calls - yes, I have tons of TSLA already, but don't want to be letting that go below cost-basis, unless I can help it
Outcomes for Friday close:
<200 +500 more TSLA and can write 10x ATM calls, or maybe even some ITM calls to cover the down-side a bit
>200 the -c200's exercise against the 500x TSLA @198 and pocket the extra $2k from the difference
~200, close out for pennies, roll, allow exercise, whatever I feel like
I don't feel too much risk selling puts or buying shares down here, but what the hell do I know...
Never advice
I don't get the drop, it's based on, well, nothing, unlike AAPL which was clearly affected by the iPhone guidance warning in pre-market, but has pretty much recovered - so real material information doesn't seem to matter, sentiment and manipulation wins the day!
Anyway, don't panic, I setup a small 5x 11/11 -p/-c200 straddle for $7.44/$7.1 and bought 500x TSLA @$198 on one of the dips to cover the short calls - yes, I have tons of TSLA already, but don't want to be letting that go below cost-basis, unless I can help it
Outcomes for Friday close:
<200 +500 more TSLA and can write 10x ATM calls, or maybe even some ITM calls to cover the down-side a bit
>200 the -c200's exercise against the 500x TSLA @198 and pocket the extra $2k from the difference
~200, close out for pennies, roll, allow exercise, whatever I feel like
I don't feel too much risk selling puts or buying shares down here, but what the hell do I know...
Never advice
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