john tanglewoo
2012 Roadster Owner
What major events/announcements does Tesla have coming up? Looking at selling some 200 covered calls
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Wiki Selling TSLA Options - Be the House
- Thread starter adiggs
- Start date
JSML
Member
When the SP last came down below 180, 2 to 3 weeks ago, I also feared the SP would drop so much that I would need to sell shares. I believe I had a similar line at about 130 or so for a margin call.
Here is what I did, which may not work for you or anyone else and this strategy has its own dangers. I used the analyzer to make sure this is something that works for me personally and works with the way I think. Now I am comfortable just sitting on my position even though I am leveraged.
I sold Jan 2025 400 calls and 480 calls at a ratio of 1.6 to 1 to my underlying. I received 27% of my total equity as the premium for selling those calls. This had the same effect as deleveraging my holdings at the expense of upside down the road.
If I didn't sell any more CCs, it's a pretty safe play as I should be able to buy more leaps or shares as the price moves up to alleviate the 1.6 to 1 ratio. I am current selling even more CC's on top. If the price should move up fast, I would need to take a loss on those shorter term CC positions. If the share price should go to $ 600 over night, my account would be wiped out. I have portfolio margin which allows me a bigger ratio on CCs which is good and bad.
Here are the dangers as I see it.
1) Jan 2025 is currently the last available options date. There is no other time frame I can roll CCs to beyond that to mitigate the position. This will change in the future.
2) If the price moves up fast, I will need to take a large loss on short term CC's or roll them and create a bigger liability. I tend to take the loss. This could be the proverbial picking up pennies in front of a steam roller. I see the price trend is still down at the moment.
3) Another downside is if the price moves up, my total equity will not improve much until after the 2025 CCs have expired.
If anyone sees additional dangers please comment. I appreciate it as I can still unwind these positions if needed.
The benefits:
1) There is no price now that I would get margin called and I didn't have to sell any shares.
2) If the SP is below 400 in Jan 2025, I make a decent profit off the CCs.
A few of the reasons I did this
1) I have come to believe level 4 FSD or robot taxi will not happen any time soon.
2) A recession is likely by all accounts.
3) The frothy market conditions where PE multiples shot up for many tech firms will not happen again soon.
closed my Jan 24 500 calls against all shares in personal - another ~ 2K for last week - 20K total since around earnings ..
now waiting for turkey run
santa rally and semi trucks ... 
Well, 140 is only 20% down from here. If the rest of the market holds we aren't going there. But we are down 4X the market everyday. If the market in general gives back the CPI gains, it could go much lower and maybe bring TSLA down 20-30%. I can't take the risk.
A short update from an options newbie. I've sold a lot of CCs the last year. My special tax circumstance means I really don't want my shares to be called away, but as long as I roll or cover the call before it gets too close I'm golden. And since I have no margin, falling share price just means I can roll the CC down and back to give me more timewise leeway. I feel really wierd being pretty happy about all the red days. My share value goes down, but I'm not selling and I nibble another $1000 here and there whenever it falls. Rolling out and up whenever the share price does close and gets too close for comfort. It seems a bit like free money which is what gets my spider sense yellling at me.
Yeah I get you, I think I will be in trouble also at $130. The Nasdaq Composite vs Tesla YTD are at about 1.89x. I have seem some people claiming that 8000-7000 would be the market bottom. That would put us at $140 worse case scenario. Elon really sold shares at the worse time because Tesla should be 10% higher than where we are right now. $160 is suppose to be a really strong level I hope we bounce hard there.
bkp_duke
Well-Known Member
Momentum trading? Seems like a downward spiral until something changes (macro) to cause some share buying and call buying.
With the SP at $170, so close to my Margin call $165 threshould I sold about 25% of my shares in my margin account at $171. This brings down my margin call threshould from $165 to $138 or so.
as much as I hate missing out when it goes up, I think I would hate being margin called and blowing up my account even more. On the other hand, the margin balance is now small enough that I could ride the stock down to $20/shares if I pump in cash from external lines. (was about $100/share) before.
My market timing is terrible, usually when I sell, it's going to bounce after.
. You are all welcome. Looks like I did sell that 12/16 -210c at a good time on friday though! and on the bright side I'm saving 8.5% interest (and increasing with fed rate hikes) with a 35% smaller margin loan balance.
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Re-adjusted everything this crazy morning MMD on steroids. Can’t believe that I’ve actually sold CCs at 170. Crazy. This is half of a roll down straddle for Friday. I’m expecting the SP to close below 170, and I plan to take the shares. Lowered all straddles/strangles, freeing up more cash and buying more shares at $170, though not enough to fill out another lot. Majority of the straddles are now 12/30 180s (again, unbelievable that I sold CCs at BELOW the 2-yr low).
I’m once again almost out of available cash, so unable to easily roll ITM options without calling my broker, unless the SP stays above the CSP strikes. I now expect that the SP will test $150 like @Artful Dodger said in the main thread (hedge fund payback for getting burned on the 1st stock split). Amazing insights. Thanks! I just wish that I figured that out months ago. Furthermore, I expect that the SP will remain suppressed by tax loss sales until January, even though we should see some kind of Santa Claus rally starting next week. Dodger’s post
Finally, of course, @Max Plaid was absolutely correct: those bought 12/09 c220s are now almost worthless, so beer money pissed down the drain. Oh well. Remember folks, buying short-term options is like trying to catch a falling knife, usually you miss and it cuts. GLTA and careful out there.
I’m once again almost out of available cash, so unable to easily roll ITM options without calling my broker, unless the SP stays above the CSP strikes. I now expect that the SP will test $150 like @Artful Dodger said in the main thread (hedge fund payback for getting burned on the 1st stock split). Amazing insights. Thanks! I just wish that I figured that out months ago. Furthermore, I expect that the SP will remain suppressed by tax loss sales until January, even though we should see some kind of Santa Claus rally starting next week. Dodger’s post
Finally, of course, @Max Plaid was absolutely correct: those bought 12/09 c220s are now almost worthless, so beer money pissed down the drain. Oh well. Remember folks, buying short-term options is like trying to catch a falling knife, usually you miss and it cuts. GLTA and careful out there.
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Well at this rate we will soon be below GM's P/E
TSLA might be the only mega cap stock that can keep going down like it's nothing. I think the low volume over the past week or so is more likely retail shorts getting trapped but there is nothing to suggest the stock will turn soon. In other words there is no fear.
Hope everybody is holding up well. I know it sucks but hang in there folks. Trade small, set up stop losses or don't trade if you don't have to. IMO all this nonsense unrelated to Tesla fundamentals is just FUD. People worried about the impact to Tesla's demand because of Elon's non-Tesla stuff are just being paranoid.
Sold some ITM calls when TSLA broke 172.50. Have a tight stop loss order setup in case we see a turnaround today. Dan thinks 165 is potentially in play this week!
TSLA might be the only mega cap stock that can keep going down like it's nothing. I think the low volume over the past week or so is more likely retail shorts getting trapped but there is nothing to suggest the stock will turn soon. In other words there is no fear.
Hope everybody is holding up well. I know it sucks but hang in there folks. Trade small, set up stop losses or don't trade if you don't have to. IMO all this nonsense unrelated to Tesla fundamentals is just FUD. People worried about the impact to Tesla's demand because of Elon's non-Tesla stuff are just being paranoid.
Sold some ITM calls when TSLA broke 172.50. Have a tight stop loss order setup in case we see a turnaround today. Dan thinks 165 is potentially in play this week!
Scrambling to survive this drop, bought a bunch of *sugar* puts out to mid December....going to transfer some couch $$$ over and have a few more injections coming in mid December, but this is crazy town.
I am also considering selling CC against all my shares for Jan 2025 around 450-500 strike. It is likely when we would get out anyways...
I am also considering selling CC against all my shares for Jan 2025 around 450-500 strike. It is likely when we would get out anyways...
WoW -5% seriously
This drop if getting out of control.
I didn’t know a stock this gold could be that much oversold and have no bounce ever.
This drop if getting out of control.
I didn’t know a stock this gold could be that much oversold and have no bounce ever.
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Believe me, I take no pleasure in being proven correct on weekly call buying... I guess I should be happy I did my -c180/185/190 call sells on Friday, but I was really hoping they'd go ITM and the straddled puts would expire, I suppose still time for it to turn-around this week, but not really started the way I wanted
I give up. This trading action is stupid. Rolled all my naked sold puts to Feb 2023. I can't deal with this "someone knows something" BS. TSLA calls paying so little right now I'm going to switch to NFLX and SNOW soon, which means selling naked calls. If you guys are interested I'll post their charts and strike prices while we wait for this nonsense to blow over.
I don't think I have seen the stock so weak in a long time. Wow it's like brokers have disabled the buy button for TSLA.
Volume today is not insignificant either. I doubt it's Elon but man I can't fathom how much more negative the sentiment can get if we see more form 4s from him. It's tough not to think about it, none of this makes any sense especially when you compare it something like an NVDA that had bad results AND gave poor guidance.
Every down day we keep telling ourselves this is the bottom but this slow bleed has been painful to watch.
I'd be interested in SNOW, can't imagine a "high growth" stock SNOW not getting hit in this environment. Thanks.
Now holding 8x 175CC for this week. I also cannot believe we’re down here.
I have been selling shares and buying 2025 calls in my retirement account.
I have been selling shares and buying 2025 calls in my retirement account.
Now we're in oversold territory, however, it's sick seeing the sell volume is getting higher everyday. I'm not sure how this price action will work, but TSLA need a really good P&D and ER to become attractive again. May be 2-3 consecutive good ERs, not just one, and in the meanwhile, hoping for the market does not screw up.
I don't understand it at all, it's relentless... some have posited that it's Delta-hedging MM's selling shares to cover vast numbers of puts being bought, I can't imagine a lot of folks selling down here unless they're being forced, so what it going on?
For my part, I just try to get to the end of the year without doing anything rash, keep my realised profits intact, but I'm going to go a bit more aggressive with selling calls, certainly as of January - as mentioned a while back, will do this with a limited number of contracts, 10, 15, 20, something like that, which will give an escape-path in case of a sudden reversal -> can either add more contracts to facilitate a roll, or just throw them up and out 3 months, but still have tons of shares unwritten against to continue the weeklies at a higher price-point...
If this keeps up by the time we have a third consecutive good ER TSLA will be a five dollar stock with a PE of 0.4.
I think almost everything we are seeing is about China right now. The market doesn't believe TSLA can close on the promises of 4Q and believes that a shutdown could come at any moment. The sick thing is, I almost feel like a shutdown in Shanghai would pop the stock because it has been priced in.
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