Similar here, I opened a few 175cc 12/23 for 1.65. Please make me roll these.
-
Want to remove ads? Register an account and login to see fewer ads, and become a Supporting Member to remove almost all ads.
Wiki Selling TSLA Options - Be the House
- Thread starter adiggs
- Start date
JSML
Member
Really sorry to hear that. Hope everything will turn out OK.
I liquidated all my puts at the start of the Ukrainian war last February at the lowest at market open and the stock recovered 8% intra day. My wife made me promise to never do that again, I would have liquidated everything at market open if I didn’t promise that. I am so ****ing bearish right now it’s not even possible.
Share conversions this morning - from shares bought at around $300 earlier this year (tax loss harvest)
2000 shares over to 70 January 2025 $200 Leaps at $44 each
Better delta, and upside than the shares and now have some spare cash to write some Buy / Writes the next couple of weeks.
Not a bad hedge and pretty close to the low - going to sell LCC's against them in the near future.
2000 shares over to 70 January 2025 $200 Leaps at $44 each
Better delta, and upside than the shares and now have some spare cash to write some Buy / Writes the next couple of weeks.
Not a bad hedge and pretty close to the low - going to sell LCC's against them in the near future.
Are we expecting a -60% or -80% downturn before buyers start piling in because of the company fundamentals since Elon pretty much destroyed the magic Elon fan base aura and alianated a good portion of the original investors
Who knows, but these have been historically great times to convert shares to leaps and a number of people in this thread have done well with it.
Maybe it becomes a total loss... who knows but I am ok with this risk / reward position which is not my whole account but about 30% conversion.
Going to get fresh shares from $175 Puts I wrote last week anyway...
EVNow
Well-Known Member
Nope - today - these are not wash sale affected since it is from shares to an option
EVNow
Well-Known Member
Are you sure about that ? From everything I've read, options and stock are treated the same.
Wash Sales and Options -
The wash sale rule can apply to trades involving stock options.
fairmark.com
Buying Call Options
If you sell stock at a loss, you’ll have a wash sale (and won’t be able to deduct the loss) if you buy substantially identical stock within the 61-day wash sale period consisting of the day of the sale, the 30 days before the sale and the 30 days after the sale. You’ll also have a wash sale if, within the wash sale period, you enter into a contract or option to buy substantially identical stock.Example: On March 31 you sell 100 shares of XYZ at a loss. On April 10 you buy a call option on XYZ stock. (A call option gives you the right to buy 100 shares.) The sale on March 31 is a wash sale.
It doesn’t matter whether the call option is in the money. This is an automatic rule. If you buy a call option in this period, you’ll have a wash sale. And that’s true even if you never exercise the option and acquire the stock.
Expecting is different from being possible. I sold a third of my TSLA portfolio this week so I'd have enough cash to cover living expenses for 7-15 years. I don't *think* that TSLA will drop into the double digits, but it's a possibility that's exacerbated by Elon.
With my new cash, I wrote my first naked puts today for Dec 23 @ 140 for 1.06. Then got nervous and closed for 1.04, netting .02 which probably went to TD. Still, a win's a win (exc commissions) and I haven't had any this year, unless I count the shares sold from 2019 this week.
I consulted my accountant and he thinks it will be fine. Guess we will find out if I get a nice note from the tax man!Are you sure about that ? From everything I've read, options and stock are treated the same.
Wash Sales and Options -
The wash sale rule can apply to trades involving stock options.
Buying Call Options
If you sell stock at a loss, you’ll have a wash sale (and won’t be able to deduct the loss) if you buy substantially identical stock within the 61-day wash sale period consisting of the day of the sale, the 30 days before the sale and the 30 days after the sale. You’ll also have a wash sale if, within the wash sale period, you enter into a contract or option to buy substantially identical stock.
Example: On March 31 you sell 100 shares of XYZ at a loss. On April 10 you buy a call option on XYZ stock. (A call option gives you the right to buy 100 shares.) The sale on March 31 is a wash sale.
It doesn’t matter whether the call option is in the money. This is an automatic rule. If you buy a call option in this period, you’ll have a wash sale. And that’s true even if you never exercise the option and acquire the stock.
Are you sure about that ? From everything I've read, options and stock are treated the same.
Wash Sales and Options -
The wash sale rule can apply to trades involving stock options.
Buying Call Options
If you sell stock at a loss, you’ll have a wash sale (and won’t be able to deduct the loss) if you buy substantially identical stock within the 61-day wash sale period consisting of the day of the sale, the 30 days before the sale and the 30 days after the sale. You’ll also have a wash sale if, within the wash sale period, you enter into a contract or option to buy substantially identical stock.
Example: On March 31 you sell 100 shares of XYZ at a loss. On April 10 you buy a call option on XYZ stock. (A call option gives you the right to buy 100 shares.) The sale on March 31 is a wash sale.
It doesn’t matter whether the call option is in the money. This is an automatic rule. If you buy a call option in this period, you’ll have a wash sale. And that’s true even if you never exercise the option and acquire the stock.
At the end of your link: "These remarks are simply my interpretation, and won’t necessarily reflect the interpretation of the IRS or the Treasury. What’s more, other tax pros may have a different take on this question. Unfortunately, there’s no sign that official guidance on these issues will be forthcoming in the near future."
Also, the washed loss is added to the cost basis, so you get that back when you sell the calls later anyway.
That's what I thought most of this year too, which is why I held onto my spreads too long, recovering only 20% of their highs. And that was mostly through sheer luck, because I made a mistake last year that realized huge gains from the long portion of a spread, but not the losses from the short leg which aren't applied until this year. IRS got the money, but I sold closer to the high and then current low.
When I sold, I accepted that there were major differences this time:
1) Elon is no longer focused on Tesla, and is using TSLA as his piggybank at scale. His foundation also has a lot of shares. He's shown that he'll sell without regard to impact to SP, and owns enough to keep selling in these amounts for years. That's ignoring the controversy that he courts, which may eventually catch up to Tesla.
2) The macros are still unfavorable with interest rates continuing to rise. I don't think we've hit the turnaround point yet, because people are still spending. If the recession hits badly enough, we may be far away from the turning point and the leaps may not outlast the options.
That said, I'm still holding about 1/3 of my spreads and options. Might sell those too for pennies on the dollar, for the reasons above.
How does this sound to you guys?
Instead of selling shares and using the cash to close all the BPSs at a huge loss now....
Sell enough shares that I could close at all BPSs (so they are all cash secured) and roll them to 2025. That leaves me with only 20% of the shares I had 5 months ago, and a huge pile of cash to cover all the BPSs. If they end out of the money in 2025 I lose out on the growth of all the shares, but I have the pile of cash that was backing all the BPSs. If the SP is still in the shitter in a year or two, close them for the loss if I have to.
Seems like a good salvage. What am I missing?
Instead of selling shares and using the cash to close all the BPSs at a huge loss now....
Sell enough shares that I could close at all BPSs (so they are all cash secured) and roll them to 2025. That leaves me with only 20% of the shares I had 5 months ago, and a huge pile of cash to cover all the BPSs. If they end out of the money in 2025 I lose out on the growth of all the shares, but I have the pile of cash that was backing all the BPSs. If the SP is still in the shitter in a year or two, close them for the loss if I have to.
Seems like a good salvage. What am I missing?
As someone who hates the idea of rolling I would suggest looking into the option of closing all your BPS and start selling CSPs something closer to the current share price. Is that an option?
If the SP drops even further, at what point, if any, would you run into a margin call?
One factor to temper this fear is that Elon has to own a certain percentage of TSLA to maintain control. Any less, and the hedge funds can force him out, like how early Paypal investors forced him out.
Edit: So I don't see the "piggybank" scenario playing out. Besides, that piggybank was supposed to be used to fund Mars colonization.
Similar threads
