Wiki Selling TSLA Options - Be the House

[JSML]

Extending this logic to its natural conclusion is why I often have dabbled in just selling CCs for the longest dated strike available. Right now I'm back to selling weeklies because it doesn't make sense to sell a super long dated call at a ~2 year low, but doing the math on "safe" weeklies, you could get the equivalent return by selling like a Jan 2025 $450 or something. (I'm approximating here based on the last time I did the comparison a few weeks ago).

I know most of all of us on this forum are very bullish in the long term, so capping upside to "only" $450 a share seems like a bad idea, but I fear that scenario a lot less than I fear getting my face ripped off selling a weekly CCs when a hertz-buying-100k-teslas kind of week happens and you have to scramble to get out/roll.

I'm curious how others here think about this tradeoff? If (feels like a pipe dream at this point) we ever get a crazy run up like we had in 2021 I will certainly just sell some not too far OTM LEAPS and be happy.

At strikes of 400 to 450 for long dated calls, when the SP moves against you, your available margin may take a big hit. It's happen to me before. At higher SP, it does not matter as much. As long as the delta is really small, it doesn't matter as much.

I now only use those as a hedge against SP going down and I will get out them even at a loss if needed.

Just now, I closed my hedge of Jan 25 - c 480 at a 5% profit for that same reason.

Doing weeklies is much more comfortable for me when the SP is so low. I can keep the extrinsic value at a lower level with shorter expirations.

I also closed Dec 16 - c 197.5 and Dec 16 -c 202.5 for 65% profit just now.

For this week, kind of feeling contrarian and thinking the price will be up after CPI. Will look to sell more Dec 16 weekly CCs on Tuesday no matter if the price is up or down.

 

[CHGolferJim]

I have $195 and $200 12/16 CC to either hold until expiration, or close by 12/12 to be out before the inflation report, and thinking to stay out for the holidays and through the 1/2 P&D. Have made double my CC income target in the past month, 8/1-12/7 almost even with rolls and DITM rescues, 1/1-7/1 was excellent. Just one data point.

The poor results 8/1-10/15 led to a change in strike price selection from close to ATM to +10%OTM, and that has worked pretty well. Of course, it would during a downtrend, but there has been some volatility to navigate.

Haven’t touched my long shares in years, other than to sell half and buy LEAPs (admittedly not the best timing). Overall, HODL!

Although I think these are safe for 12/16 after this morning’s dip, I put in GTC limit orders at half of Friday’s closes for half of the $200s and all of the $190s. Depending on SP action 12/14-1/2 P&D (which I intend to watch rather than play), may boost early 2023 strikes to +15% OTM for awhile.

Edit: closed at $1.03 and $0.38, about 60% below Fri close, for a minimal cash hit.

 

[scubastevo80]

Wrote some 150/135 BPS for this Friday for $0.35. Hopefully today is the worst of this week's downtrend in TSLA given the QQQ is up today.

 

[Yoona]

Although I think these are safe for 12/16 after this morning’s dip, I put in GTC limit orders at half of Friday’s closes for half of the $200s and all of the $190s. Depending on SP action 12/14-1/2 P&D, I may boost the strikes to +15% OTM for awhile.

same, i closed all my 12/16 -c180, -c187.50, -c210 @~96%
all gains realized so it's still a win-win even if sp falls tomorrow

edit: trying to maximize gain is a very bad idea (quit while i'm ahead instead of potential loss on a reversal)

 

[intelligator]

same, i closed all my 12/16 -c180, -c187.50, -c210 @~96%
all gains realized so it's still a win-win even if sp falls tomorrow

edit: trying to maximize gain is a very bad idea (quit while i'm ahead instead of potential loss on a reversal)

Took profit closing 12/16 -c180. Taking @mongo Saturday post non-advice to not look at position but value, I used proceeds to close out Jan '23 -c210 so that I can re-deploy... that position wasn't going to deliver anything more. Thinking to move Jan '25 -c550 in to achieve the same; rather than close for full debit, roll in for half and expire early... but that's 12/16 -c187.5 ... nah.

EDIT: Sent half to 12/16 -c195, other half to same 12/16 -c200.

 

[Yoona]

i am also thinking 175 or even 170

there is a "Fair Value Gap" on those levels

View attachment 877532

Fair Value Gap Basics | TrendSpider Blog

If you're a price action trader, you might be familiar with a concept that has been making the rounds lately called the Fair Value Gap. In this article ...

trendspider.com

170 "Fair Value Gap" filled

 

[JustMe]

Here’s hoping a double bottom is forming here at $170…

 

[Yoona]

Here’s hoping a double bottom is forming here at $170…

 

[john tanglewoo]

I have been sitting on the sidelines for about a month now, watching all the nonsense with Twitter.
As this is a big week for Fed CPI, I am leaning towards sitting out another week. Any bets you guys are making?

 

[OrthoSurg]

Sold 80x 16/12 CC190 Friday for 3.50 and closed them for 1.00 today. Anything above 50% profit in one day is good enough for me.

Waiting for a CPI/FOMC bounce to sell again.

 

[BornToFly]

I have 50X 190CC for Friday I haven't closed yet. Still worth $4700. I feel like 165 is more likely than 190, and the extra cash will be good to have if we tank tomorrow. I feel like I can roll the 190s if we actually go up the next two days. I'm thinking even if we were to hit 200, there would be a rejection back down.

 

[dl003]

I strongly advise against selling fresh CC's here. It looks to me we might have completed wave 2 of 3.

The risk : reward is terrible for opening fresh CCs.

If I'm wrong and we go down much further, most you're going to gain is ~ $1 per share
If I'm right and we shoot up with CPI tomorrow, you'll be looking at the biggest spike up within this sequence and there'll be no guarantee it will pullback at a certain level...

Early AM tomorrow will be when last week Tesla insurance registration in China comes out. Could be a catalyst - or not.

 

[SebastienBonny]

Sold 80x 16/12 CC190 Friday for 3.50 and closed them for 1.00 today. Anything above 50% profit in one day is good enough for me.

Waiting for a CPI/FOMC bounce to sell again.

Same. Sold 195 CC on friday for this friday For 1.60.
Bought it back at .60 today.
Couple of thoughts:

- Selling on friday and closing on monday gives 60% or more gain last weeks (maybe an idea for @Yoona to compare Friday highs with Monday lows? )
- Aiming for 2 dollar/share just seems to risky for me, so at this SP I’ll take 1/contract. That’s one free share/contract/two weeks, so not bad looking at it that way

 

[vikings123]

I sure hope that 166 holds!

 

[EVNow]

View attachment 884080

TSLA at the lowest level for the day - even as NASDAQ is at highest level. Not looking good.

IMO, twitter activity over the weekend has increased perceived risk profile of Tesla.

 

[juanmedina]

I sure hope that 166 holds!

I just want the stock to go into capitulation mode so we can move on.

 

[JustMe]

I just want the stock to go into capitulation mode so we can move on.

No thank you

 

[OrthoSurg]

I sure hope that 166 holds!

If it doesn’t then we are going to 150s then 138

Doesn’t seem interesting

 

[JustMe]

VIX and TSLA IV seem to be peaking, which is good…

 

[vikings123]

I just want the stock to go into capitulation mode so we can move on.

Trust me we don't want to see capitulation. Or maybe if you have cash saved up you want a capitulation.

The volume is insane, seems to have picked up a lot in the last 30 minutes or so. Just crazy how detached the stock has become from the macros, Heavy put buying coming in, they are going for the 166 level.