Wiki Selling TSLA Options - Be the House

[Yoona]

Did you open these?

nope, someone reminded me of CPI tom

 

[vikings123]

That is a lot of pain since Friday, hopefully we can all get through this period without further damage. Selling is relentless and they keep coming for some crazy OTM puts 160 for Dec. 145 for Jan 2023. Well we can only hope that Elon decided to sell more today, I just hope it wasn't a whale liquidating his TSLA portfolio. 100 Million shares traded today, well on pace for highest volume in the past week or so.

I know this might not be the best time to ask. Any good YOLO trades? The fundamentals of the company haven't changed one bit(well maybe a little bit with the China demand story). I reduced my hedges and I'm planning to buy calls. I think 180 was our low from March 2021 so hopefully we bounce here.

 

[corduroy]

This relentless slow drop is killing my ITM puts. Having to roll the second time in 3 days. I'm just trying to survive this and I think I'm only trading SPY ICs from now on. I've reached peak Elon and Twitter fatigue.

Maybe this is what capitulation feels like?

 

[elasalle]

That is a lot of pain since Friday, hopefully we can all get through this period without further damage. Selling is relentless and they keep coming for some crazy OTM puts 160 for Dec. 145 for Jan 2023. Well we can only hope that Elon decided to sell more today, I just hope it wasn't a whale liquidating his TSLA portfolio. 100 Million shares traded today, well on pace for highest volume in the past week or so.

I know this might not be the best time to ask. Any good YOLO trades? The fundamentals of the company haven't changed one bit(well maybe a little bit with the China demand story). I reduced my hedges and I'm planning to buy calls. I think 180 was our low from March 2021 so hopefully we bounce here.

I would say definitely Jan 25 calls in 300-350 range.
Jan 25 350's < $30. With Jan 25 - atleast you can stay alive for 2 more years

I closed all my mid calls with losses. Have Jan 24 CC's with gains and added jan 25 350's ... after SP went < 180

YOLO once, but still could get MC'd multiple times ....

 

[Max Plaid]

This relentless slow drop is killing my ITM puts. Having to roll the second time in 3 days. I'm just trying to survive this and I think I'm only trading SPY ICs from now on. I've reached peak Elon and Twitter fatigue.

Maybe this is what capitulation feels like?

Hopefully this is the bottom - I think market expected the GOP to get into power and perhaps have some influence on inflation and the FED, but it didn't happen. Also note we have a crypto meltdown ongoing thanks to Binance and FTX, that must be causing a lot of folks some pain and margin calls, forcing to liquidate other positions -> I'm sure plenty of retail TSLA hold BTC as well, and 2-year low today -> plus will be an impairment on whatever holdings Tesla still have

 

[vikings123]

I would say definitely Jan 25 calls in 300-350 range.
Jan 25 350's < $30. With Jan 25 - atleast you can stay alive for 2 more years

I closed all my mid calls with losses. Have Jan 24 CC's with gains and added jan 25 350's ... after SP went < 180

YOLO once, but still could get MC'd multiple times ....

It's more than 2 years(26 months) so don't sell it short . I might even do 400s because why not, these are YOLOs . There is so much negative sentiment in the market.

I will wait for CPI tomorrow, pretty sure we go up regardless of what the CPI says but will YOLO some Jan 25 400s, I like the risk/reward.

 

[elasalle]

It's more than 2 years(26 months) so don't sell it short . I might even do 400s because why not, these are YOLOs . There is so much negative sentiment in the market.

I will wait for CPI tomorrow, pretty sure we go up regardless of what the CPI says but will YOLO some Jan 25 400s, I like the risk/reward.

yup the more OTM, the more leverage so why not

not advice, not for margin

 

[CHGolferJim]

This is also why I only(*) roll for a credit.

However, in case it isn't clear to anybody reading, a roll of a losing position (which is always what I mean when I talk about a roll, and I believe is the typical usage throughout the thread) is the realization of a loss plus the creation of a new and even larger position.

That new and even larger position is what creates the credit. It also creates an even larger liability. That larger liability can earn back the already realized losses and do it fast, but it can also just sit there on the books, or even as we've been seeing people reporting - those DITM options (puts lately) can get early assigned, thereby creating full realization of the position.

Of course - then you can turn right around recreate that DITM position.


I always roll for a credit (where always is 99.99% - I do consider debit rolls as well, and almost never use them). But when closing pieces of a losing position, as I've begun doing with DITM puts, I only use realized gains to pay for those exits. This insures positive income/cash flow throughout.

(NOT-ADVICE. Something to consider. This idea is also the cash flow vs. income statement post I put up recently)


If you read and study option trading systems, many of those involving selling options use 30-45 days as the optimum range for DTE. I believe that a big chunk of the reasoning has to do with generating a useful return on much lower IV stock than we're accustomed to working with.


I'd love it if you'd expand on this idea - maybe add in some recent historical trades (what you saw and were acting on at entry, what made you decide on the exit, how often you're seeing your setups, stuff like that) as additional examples / insights into what and how you're doing things

The reason I ask is that we've got people working at many different DTE. Most are in the 1-2 week range, but we've also got day traders and a bit longer. I don't think I'e seen anybody (except maybe @CHGolferJim talk about monthly+ type DTE. More examples and details over this wider time frame will, I think, be valuable to many. Whether they follow up and do it for themselves or not. I know it'll be valuable to me - in the back of my mind I'm always thinking about how to minimize my time and energy, and one mechanism would be higher DTE (I'm still in the 1-2week DTE trades).

Just to be clear, I only did that to escape CC that had gone DITM. Since then, I’ve steadily rolled down and in during the SP swoon these past 2 months. As of now, I’ve just about escaped all those positions with small cumulative net credit / low recent income. Now I’m thinking of pursuing a simpler approach for the next 4 months as mentioned earlier — biweeklies at 10% OTM without regard to premium.

 

[ice]

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

Never thought the day would come that I managed to take all my shares back from a disastrous CC sale gone wrong (6 months roll). I finally buy to closed my 12/16 -250c @$0.82 today for 98% profit. Stock price around $177.56. (Was Sell to Open at $58.75/contract as part of a roll) . For 5.5 weeks to expiry and $0.82, I don't think the remaining premium is enough to risk a bounce for peanuts even though it went from DITM to 42% OTM and has a good chance of expiring worthless now. I want to release my locked up shares to sell CC on a bounce, maybe I can make that $0.82 back that way.

This started out as

Option | Credit | Date | SP (Pre Split) / Post Split
5/27 -600c | $38 credit/contract ($12.66 post split) | 5/25/2022 | $628.55/209.51
9/16 -700c | $5.82 credit/contract ($1.94 post split) | 5/26/2022 | $708.1/236.03
8/5 925c 9/16 705c | day trade between roll $9.23 credit/contract loss (3.07 post split)|
10/21 -720c / -240c | $8.94 credit/contract ($2.98 post split) | 8/3/2022 | $924.68/308.22
12/16 -250c | $2.62/contract post split credit | 9/22/2022 | $875.37/291.79

Close 0.82/contract |11/9/2022 |$532.68/ $177.56

net $16/contract credit (post split) over 24 weeks , so average $0.66/week?

Unbelievable drop though these went from $300 DITM (if I didn't roll the -$600c) to 42% OTM.

But I might have to do daily margin call spreadsheets again.....right now will be margin called at $160s. I really wish I haven't bought back those DITM $750c and $780c.....thought we are suppose to be at $1500 pre split end of year 2022? lol

 

[JustMe]

I’m calling for a massive rally tomorrow

I mean, I don’t expect it, but I’m calling for it

 

[Cherry Wine]

nope, someone reminded me of CPI tom

Me, lol.

 

[OrthoSurg]

I’m calling for a massive rally tomorrow

I mean, I don’t expect it, but I’m calling for it

I need it

I think a CPI of 20% is baked in at this point

This market is beyond brutal.

My underwater puts are probably going to be assigned at some point. Don’t have enough margin to roll them over. Will get margin called if we drop another 3%

This is not fun

 

[AquaY]

I'm worried that Twitter revenue drop will continue, and Elon decides to fund it by inserting more cash, getting cash from selling more Tsla.. Burning his assets

Please tell me I shouldn't worry about this..

If you want me to lie I'll tell you not to worry about it

 

[Zhelko Dimic]

Just wanted to remind everybody of this observation. Absolutely not trying to brag. While this signal has worked out 100% of the time since I've started tracking it, I tend to not make a big deal out of it due to my timid nature. However, if you're overleveraged and see me saying things like this, please be aware that the risk is very real.

In all 4 of these instances: late February 2021, early June 2022, August 26th 2022 and November 4th, 2022, TSLA proceeded to lose 15%+ in a matter of days.

Please type it in CAPITAL BOLD next time!

 

[Zhelko Dimic]

I need it

I think a CPI of 20% is baked in at this point

This market is beyond brutal.

My underwater puts are probably going to be assigned at some point. Don’t have enough margin to roll them over. Will get margin called if we drop another 3%

This is not fun

When I get to $0 margin, I sell 13 shares and buy 1 put, strike price $30-$40 under SP for a week or two ahead. Then I roll if I have to.
This increases margin significantly
13 shares because IB enforces not more than 1:8 rule on combined options/stock combo trade. Combo is usually the only way to execute trade when my initial margin is in the toilet and my maintenance margin is around $0

 

[Yoona]

TSLA on CPI days: red or green?

in 2022,

• 70% chance red on the day of
• 70% chance red the next day

 

[corduroy]

TSLA on CPI days: red or green?

in 2022,

• 70% chance red on the day of
• 70% chance red the next day

 

[ReddyLeaf]

Straddle Report: Today’s dumpster fire was amazingly brutal on straddles as well. Unable to keep strikes in contact with the SP. My one month away 12/09 -c215s lost 48% (-$2.43) just today while the -p215s were +37% (+$10.50) just today. There’s absolutely no way to manage these fast enough without making timing/directional bets. Tomorrow, I will try to roll out another week and down to 200s, but pretty sure this will require a debit roll. I really don’t want to get too close to the EOY or Christmas rally.

 

[juanmedina]

Cory thinks that we are in capitulation mode but I wonder if he is aware that Elon is selling:

 

[Skryll]

Is it just me or has the last 12 months been a harvesting of option players? I used to be able to sell calls and puts for profit, but now I just get screwed whichever way I turn. Even worried about my long leaps at this point. With perfect hindsight, selling calls would have been winning 12 months mostly