Wiki Selling TSLA Options - Be the House

[Oil4AsphaultOnly]

TSLA Day of Week Seasonality

in 2022, only 44% of Thursdays and Fridays are green (best days to STO -p for next week?)

View attachment 873448

I'm pretty sure this statistic is self-referential. Since 2022 has been a down year, the average of all weekdays HAS TO BE down. With Tues & Wed being average up days, then Thurs & Fri has to be down in order to bring the average down. You should back-test this against 2021. I'm going to guess those weekdays were up days that year? Considering that we're up today, while mon-wed were down this week, I'd ignore the statistics for this week.

And possibly next week too, if Elon's done with his stock sales by tomorrow?!

 

[Yoona]

I'm pretty sure this statistic is self-referential. Since 2022 has been a down year, the average of all weekdays HAS TO BE down. With Tues & Wed being average up days, then Thurs & Fri has to be down in order to bring the average down. You should back-test this against 2021. I'm going to guess those weekdays were up days that year? Considering that we're up today, while mon-wed were down this week, I'd ignore the statistics for this week.

And possibly next week too, if Elon's done with his stock sales by tomorrow?!

TSLA 2021 Day of Week Seasonality

much better

in 2021, 66% of Mondays were green (best day to STO -c?)

 

[rikkert]

I'm aware that we've been seeing what looks like increased occurrences of assignment and I have been rolling accordingly. To my surprise, yesterday my Apr 23 333.33 puts were assigned. Sure, they were deep in the money but there was a decent amount of theta left on these. I might even make a profit by selling the assigned stock and STO-ing these puts again (no capital gains taxes where I live). Weird!

 

[adiggs]

The reason I said lots of loose ends were tied up is because the topping process in August - September was extremely confusing. It was impossible to tell with certainty whether TSLA was making a local top of an impulsive series, meaning 207 in June was the bottom. Like this:
View attachment 873309
Or the entire run up from 207 was a corrective series and TSLA was working on the first stage of another down leg in September, like this:
View attachment 873310
Now that the down leg scenario has played out, it seems obvious but 2 months ago it was confusing to everyone involved. The result was longs were hesitant to get out and shorts were hesitant to stay in. Coupled with Q3 P&D hype, TSLA was so damn strong relative to the market.

Once a new low was made @ 198.5, it became apparent that a lot of people were trapped up top and now they're trying to get out, which is why the initial bounce off 198.5 was so weak, only good for 35-39 points.

Maybe Elon's selling was known or at the minimum expected by bankers close to him. Maybe that's why we saw massive put bet on TSLA last Thursday just before the plunge. I demand answers!

Well, back to the plunge. It answered a few important questions:

1/ The double top formation in late August - September was the beginning of wave 1 and 2 of a large impulse series. It's not typical for wave 2 to retrace 100% of wave 1 like this but like I said, this was a confusing chart.
2/ The plunge since last Friday - early this week COULD HAVE BEEN wave 5 of this impulse series, meaning this could be THE low for TSLA. I don't expect any lower low to be made. I'm more sure of this than I did @ 198.5.

The complete picture:

The last stage of this correction began in early April and ended yesterday. It came in a zig zag formation: an impulse series, followed by a corrective expanded flat, follow by another impulse series. This is a complete formation.

The 2nd impulse series went 0.764x the length of the first impulse series
Wave 5 of the 2nd impulse series extended 1.618x of wave 4
Double bullish divergence was observed on the daily timeframe, showing exhaustive selling pressure. Kinda hard to believe considering Elon was selling the whole time but that's what the chart shows.

View attachment 873324

Bounced right at the channel support
View attachment 873325
Log scale support trendline right below @ 170. You can see how this support trendline has supported and rejected TSLA multiple times since 2010.
View attachment 873326
Confirmation: As I mentioned earlier. I want to see TSLA pulling back after 207-215. Might go as far as 230. This pullback will be deep, retracing at least 50% of the initial bounce from 175. However, at the end of the pullback, I want to see double bullish divergence on a 1h+ timeframe. It cannot go lower than 175, preferably no lower than 180. If something as impulsive as this week sell off happens, then we haven't seen the low yet and I have to rework the chart.

Can I guarantee the low is in? No. But, all the ingredients are finally here in term of price and structure. Now we just need TSLA to execute Q4 and Elon to say he's done selling. Well, if you subscribe to the idea that someone always knows, then maybe someone already knows Elon is close to being done. That's why the stock got to where it got to but not any lower.

You clearly have a lot of time, energy, and experience tied up in your study and use of Elliot Waves. This looks valuable, interesting, and useful enough that I for one am interested in following in your footsteps, but would rather not stumble through the dark and have to figure out the education experience for myself and from scratch. I'm hoping you will provide some guidance to help me get started on my own journey - speed up my own journey to working knowledge, rather than fumbling around and hoping for the best.

1) For somebody new looking to learn and put this theory of how the stock market works, what resource would you suggest to get started? I am personally fond of books, but I've also found value in Youtube video series.

2) Is there a particular charting tool, subscription services, or other tools that you find essential?

3) What else should I have asked about and didn't?

 

[chiller]

I'm aware that we've been seeing what looks like increased occurrences of assignment and I have been rolling accordingly. To my surprise, yesterday my Apr 23 333.33 puts were assigned. Sure, they were deep in the money but there was a decent amount of theta left on these. I might even make a profit by selling the assigned stock and STO-ing these puts again (no capital gains taxes where I live). Weird!

Looks to me like even after yesterdays big gain, those were at 0.00 extrinsic value (or "time value" as IB shows it as).

 

[rikkert]

Looks to me like even after yesterdays big gain, those were at 0.00 extrinsic value (or "time value" as IB shows it as).
View attachment 873490

Hmm of course, deep ITM options have almost no extrinsic value. So that makes rolling forward not necessarily a valid strategy to prevent assignment.

 

[CHGolferJim]

IV of 11/18 is at 76.90% and there is a chance of 11/18 Close being +/- 17.21 from today's Close (173.51-207.93)

not exact science, just probability

View attachment 873387

Thanks very much, is that “chance” 2 SD on a classic bell curve = ~66%, or something else?

 

[BornToFly]

TSLAs pivots - 191 to the upside, and yesterday's low 180 to the downside.

 

[jschwefel]

I'm aware that we've been seeing what looks like increased occurrences of assignment and I have been rolling accordingly. To my surprise, yesterday my Apr 23 333.33 puts were assigned. Sure, they were deep in the money but there was a decent amount of theta left on these. I might even make a profit by selling the assigned stock and STO-ing these puts again (no capital gains taxes where I live). Weird!

Agreed. I went to roll my June 23 400 puts out six months. They still had about $1 of theta value left, so I wasn’t too worried when the trade expired for the day. However, the next morning I saw they had been assigned. I’m now trying to keep at least $2 in theta going forward, so I’m into 2024 on most positions. I sure hope this turns around soon.

 

[Yoona]

Thanks very much, is that “chance” 2 SD on a classic bell curve = ~66%, or something else?

sorry, no idea!

 

[traxila]

Agreed. I went to roll my June 23 400 puts out six months. They still had about $1 of theta value left, so I wasn’t too worried when the trade expired for the day. However, the next morning I saw they had been assigned. I’m now trying to keep at least $2 in theta going forward, so I’m into 2024 on most positions. I sure hope this turns around soon.

Yeah me too been rolling out -P aggressively, all in mid to late 2023, some in 2024. Highest ones I have are in 360s.

Even closed some out at terrible losses as I sold TSLA shares been holding since 2015 or more. Needed to take that maintenance margin off the table. At least the taxes I was so worried about that stopped me from selling in the 1100 to 1200 range pre split are not an issue anymore

Tried my best to clear the margin completely. Sold 2/3 of my shares in this account since the beginning of the year (FYI have other non margin accounts, so don’t cry for me. At least I had the brains to do that…). Think I replaced most of the shares with what I would call conservative 2025 calls. Strike prices from 180 to 250 with the majority at 200. Will continue to try and accumulate more off of CCs but who knows what will happen. Think stock would have to go down to 100 for me to be in trouble now. Never say never.

4Q will be blockbuster but nothing will change. Any sign of future sale weakness and stock will be hammered. At one point PE will be completely laughable compared to growth rate and FCF and the stock will moonshot again. Cannot say when.

Want to know why AMZN gets so much respect at this point. Frustrating to see what I believe to be the most incredible company in the world for impact and also growth getting so little respect.

 

[CHGolferJim]

Concern about possible drop in SP and/or IV tomorrow prompted sale of half the planned CC — 1118-c$207.50 for $2.21 at 12:24 pm (~$191), thinking we might be done with the rise for today. Turns out that was right. Will do other half tomorrow at +10% OTM also for 11/18.

Grrrrr, could only get $1.75 this AM.

 

[dl003]

You clearly have a lot of time, energy, and experience tied up in your study and use of Elliot Waves. This looks valuable, interesting, and useful enough that I for one am interested in following in your footsteps, but would rather not stumble through the dark and have to figure out the education experience for myself and from scratch. I'm hoping you will provide some guidance to help me get started on my own journey - speed up my own journey to working knowledge, rather than fumbling around and hoping for the best.

1) For somebody new looking to learn and put this theory of how the stock market works, what resource would you suggest to get started? I am personally fond of books, but I've also found value in Youtube video series.

2) Is there a particular charting tool, subscription services, or other tools that you find essential?

3) What else should I have asked about and didn't?

I'm mostly self taught. The only reading I do is Elliott Wave Theory: Rules, Guidelines and Basic Structures
I hang out with a lot of good self-taught traders. I know they're good because for every 1 of them, there're 99 others I'm actively trying to avoid lol. So I've observed a lot of trading styles and indicators used. I've cycled through many until I found a set of indicators well suited for calling moves and limits in TSLA. These are not necessarily effective for day trading & scalping but for my purposes they're perfect:

a. Trend lines & bollinger band to set up the background
b. RSI & MACD to gauge momentum
c. EWT & fib levels to guess the limits
d. Option flow for signals of big incoming moves

My edge is really not in EWT but in detecting option flow. For someone who sells a lot of naked calls & puts of different strikes and dates, I can clearly see when something is out of wack the moment big orders hit the exchange. Instead of using services like Tradytics which can be a hit & miss, I can see in real time when a huge bet is placed on / against TSLA. These correspond very well with EWT. For example: huge call flows are often observed at the end of wave 1. That's when I know I should brace for a local blow off top the next day. I can close some naked short calls with high delta and low theta & reopen them on the pump; closing short puts is also so smart. Call flows are also detected at multiple points during wave 3, especially at the end. Put inflows appear much less often and don't follow any schedule but they're much more deadly.

 

[dl003]

Speaking of option flow, I can see that calls are building up in TSLA again today. This is both good & bad news:
Good: we'll have a pump on Monday to sell calls and close out short puts
Bad: it's too early to have this kind of blow off top. We've only just rallied 23 point from the bottom. I hope the pull back will be shallow and we'll be on our way to more gain afterward.
I've closed half of my short puts for next week. Will close the other half on Monday morning, shortly after the open. Traders are probably betting on Elon announcing he's done tonight.

 

[elasalle]

I closed out my Jan 24 CC in my personal for another 4K gains ... so like 18-19 K total (past 3-4 weeks) ... playing it safe at like 500-600 strikes.
I think a bounce based on next news cycle Semi, Q4 ... is gonna come as long as macro holds ...

Yea and I will sell again once we hit 220+

(+would have been better closing yesterday when i bought shares on margin, but my $$ became available only today ...)

 

[dl003]

We've seen this pattern before. 2 weeks ago to be exact. Hopefully it won't play out exactly the same in the end.

 

[vikings123]

I closed out my Jan 24 CC in my personal for another 4K gains ... so like 18-19 K total (past 3-4 weeks) ... playing it safe at like 500-600 strikes.
I think a bounce based on next news cycle Semi, Q4 ... is gonna come as long as macro holds ...

Yea and I will sell again once we hit 220+

(+would have been better closing yesterday when i bought shares on margin, but my $$ became available only today ...)

Pretty much every one of the stocks on my watchlist is up 10% or more for the week. TSLA is down more than 5%. It's crazy that we underperformed on a historical day like yesterday

Hopefully Elon sold everything he needed to sell and will be able to confirm it over the weekend. That should take care of the Elon sales overhang. Hopefully we do not have another overhang to worry about next week.

In terms of moves I opened 20X Nov 175/205 short strangle. TSLA range is getting tighter and tighter. Looks like 180 will be support and 196 is resistance. Plan is to close the short puts when support is broken and close short calls if resistance is broken. In the meantime if Theta helps me take profits at 30% I plan to close half and close more as profit % increases.

I'm bullish for next week mostly because of what seems to be rotation from value to growth. A lot of the healthcare and consumer cyclical stocks were down a lot today. Isn't that amazing how fast the moves are!

edit: We could squeeze into the close!

 

[ReddyLeaf]

Damn. Better lucky than good. I fat-fingered a trade this AM and was resigned to the mistake. Accidentally BOUGHT a +c190 11/11 (can’t sell because must wait until funds clear D+1). Even worse, I don’t have any cash to buy the actual shares (take assignment) now that the SP has taken off. Stupid, but… I can buyback a 11/18 put and free up the cash, or just wait and see what the brokerage does. Always wanted to see what would happen.

 

[Discoducky]

For example: huge call flows are often observed at the end of wave 1. That's when I know I should brace for a local blow off top the next day. I can close some naked short calls with high delta and low theta & reopen them on the pump; closing short puts is also so smart. Call flows are also detected at multiple points during wave 3, especially at the end. Put inflows appear much less often and don't follow any schedule but they're much more deadly.

This is super interesting and would like to know more about this process.

This is something I think I've been doing, but couldn't put into an equation like I think you are stating.

Would you share more on this process? or if you already have and I missed it, I'll go looking for it...

Edit: Just to be clear, I think I'm just doing the wave 1 thing, where a bunch of big calls are placed and then we end up seeing a big push higher (barring any big negative macro stuff).

 

[juanmedina]

I sold a few $215 and $220's for next Friday. I am thinking about waiting until next week to maybe sell the same strikes ATM.