Wiki Selling TSLA Options - Be the House

[mongo]

This might have been discussed a long time ago, but I'm wondering about wash sale rules when mixed with assignments.

I decided to liquidate most of my share this week, just can't take the 24 hour stress anymore. Have not bought shares in months, but
was recently assigned on a number of lots. So it seems when I go to sell my shares I am getting hit by the wash sale rules. There also
is some kind of "deferred loss" that accumulates.

So questions are, will I not be able to deduct any losses if I sell ALL my shares?

If I was assigned on 1000 shares and resold those same day, but next day sell my remaining 9000 shares, would I be disallowed losses on those? Or does it only apply to a matching 1000 shares?

Is there a way to use the deferred loss?

thanks!

Non-authoritative understanding (limited to situation of one taxable account). There are US centric threads on taxes.

Wash occurs between shares sold for a loss and shares purchased within 30 days either side of sale.
Instead of getting to claim the loss, the basis of the purchased shares is adjusted such that, when they are sold, the loss is claimed or offsets future gains.

If you sold 1,000 shares at a loss, then 1,000 shares purchased within 30 days either way would get their basis increased by the loss amount. If you sell those shares, and do not purchase more within 30 days either way, then you can claim the loss (via adjusted basis).

If you sell everything and have no further purchases for 30 days, all the deferred basis is claimed.

Note: capital losses offset capital gains, but only $3k a year can be used to offset normal income, remainder carries over.

 

[OrthoSurg]

Weekend charting. Damn, wish I hadn’t seen this, but….. Last week the SP filled a gap going all the way back to Nov 15, 2020, but unfortunately there’s another Aug 11, 2020 gap at 95-100 that’s clearly within sight. Will the shorts hold until they break that gap? Over 20,000 put contracts at 100 for Friday, so maybe that‘s their target. Hmmmm.

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It seems like it

Already -3% premarket

 

[OrthoSurg]

My parents just asked me to liquidate their account. I tried to convince them to wait until P&D but they are done. Right now they are tight on money trying to sell a house that has been on market for 40 days without even one showing so it is understandable. When the house sells they will double or triple their current investment. Things are getting ugly.

On the "all-in podcast" Elon thinks that he see us coming out of the recession on 2024 Q2 and he advised again to get rid of margin giving the example of a company going down 95%. He said that long term it doesn't matter because the market will recover and hit again all time highs.

With the MIC insured numbers at 19-25 Dec: 8,915 I am seriously considering liquidating my portfolio at open because of margin calls, closing my underwater puts, deleverage and sell them back when we got back in a upward channel with buying momentum. The downtrend is so strong and the bad news, covid number, FUD are so strong that this stock is attracted down endlessly. I was hoping to deleverage during the Christmas rally, Nasdaq is green however TSLA manage to have bad news or FUD news everyday about production halting.

Nobody seems to be buying that stock lately.

 

[Max Plaid]

With the MIC insured numbers at 19-25 Dec: 8,915 I am seriously considering liquidating my portfolio at open because of margin calls, closing my underwater puts, deleverage and sell them back when we got back in a upward channel with buying momentum. The downtrend is so strong and the bad news, covid number, FUD are so strong that this stock is attracted down endlessly. I was hoping to deleverage during the Christmas rally, Nasdaq is green however TSLA manage to have bad news or FUD news everyday about production halting.

Nobody seems to be buying that stock lately.

Looks like a few other folks have the same idea too justing by pre-market, this is totally irrational

 

[OrthoSurg]

Looks like a few other folks have the same idea too justing by pre-market, this is totally irrational

-5.25% premarket already.
I can’t transfer anymore money in that stock for now, don’t have enough to cover margin call, here goes my ski day with the kids having to manage losing positions in the chairlift

I might just let the bank liquidate my positions themselves to cover for the margin call, I don’t even feel like looking at my destroyed portfolio anymore. I capitulated.

 

[mickle]

I just dumped about half my shares at 117 ish pre-market, other half are protected by 120-130 strike puts so will wait on those till Friday in case there is a better position.

 

[Max Plaid]

One side of my brain is filled with fear and wants out, the other side is saying this will pass - don't know which to believe...

 

[MrMoo]

One side of my brain is filled with fear and wants out, the other side is saying this will pass - don't know which to believe...

The problem is with how messed up Elon is in the head this stock seriously has no bottom. It's not trading on fundamentals. I'm seriously worried this thing goes to like $60 before institutions are willing to start picking up shares for the long term. It seems like no fund wants to touch this thing right now.

 

[tslagreen]

One side of my brain is filled with fear and wants out, the other side is saying this will pass - don't know which to believe...

Same here. I am not an options guy, but check this thread out on occasion. My fear side is starting to get the best of me.

 

[OrthoSurg]

One side of my brain is filled with fear and wants out, the other side is saying this will pass - don't know which to believe...

This will pass but as Pierre Roberge says in its TSLA analysis. The selling will continue until it stops. And for now it continues. The HODL mentra made me hold to my shares and underwater puts like they were a lifesaving buey while we were clearly in a downward selling channel hoping for a reversal while a trader perspective I should have dropped the stock, waited for a reversal and confirmation of an upward channel and then buyback. I am tired to hope for a reversal.

 

[soundart2]

This will pass but as Pierre Roberge says in its TSLA analysis. The selling will continue until it stops. And for now it continues. The HODL mentra made me hold to my shares and underwater puts like they were a lifesaving buey while we were clearly in a downward selling channel hoping for a reversal while a trader perspective I should have dropped the stock, waited for a reversal and confirmation of an upward channel and then buyback. I am tired to hope for a reversal.

Sorry for your situation. In same boat. Unfortunately had to sell about 7% of my TSLA shares in premarket this morning in order to free up cash to (hopefully) close out major underwater puts when the market opens. I thought I had time on my side for the puts to rebound, but hadn't accounted for such a precipitous drop that would throw me into margin call jeopardy. Still will have a little (hopefully manageable) margin on my account, that will seek to reduce w/in the next couple of weeks.

Lesson learned on my first time selling puts. Felt like easy money -- technically I was right, just easy money for the person that sold them to me.

Of course the irony for all of us, is that this would be the time I'd be buying shares with two fists, but just out of dry firepower at this point. Contemplating converting some shares into LEAPS, but I should prob just take my punishment, and not lose more shares trying to get back to "even."

 

[OrthoSurg]

Sorry for your situation. In same boat. Unfortunately had to sell about 7% of my TSLA shares in premarket this morning in order to free up cash to (hopefully) close out major underwater puts when the market opens. I thought I had time on my side for the puts to rebound, but hadn't accounted for such a precipitous drop that would throw me into margin call jeopardy. Still will have a little (hopefully manageable) margin on my account, that will seek to reduce w/in the next couple of weeks.

Lesson learned on my first time selling puts. Felt like easy money -- technically I was right, just easy money for the person that sold them to me.

Of course the irony for all of us, is that this would be the time I'd be buying shares with two fists, but just out of dry firepower at this point. Contemplating converting some shares into LEAPS, but I should prob just take my punishment, and not lose more shares trying to get back to "even."

Exact same situation as you I will have to sell around 10% of my TSLA to cover my margin call.

However since I can’t trader premarket with my broker and my broker only calculate the margin requirement at midnight at the end of the trading day I am more inclined to let the day go, let everyone be liquidated by their broker and hope for a hammer candle and recovery at the end of the day heading into a Christmas rally. I hope the day play out like 27th February 2022 when we started -6% premarket, then It recovered to +2% at the end of the day. At these lows, liquidating myself at the market open or let my broker do it tomorrow I don’t really care anymore it’s sh1tty both sides

 

[traxila]

We recover from here today only if market decides news was priced in and we get a buy the news. It is possible. Just does not appear that way right now.

I feel like everything is priced in and more, but my opinion doesn’t matter.

I tried @OrthoSurg suggestion last week and sold a bunch of DITM calls with expirations early next year. This will mitigate my issues if the stock doesn’t bounce a bit, but the question remains, where is the bottom for both TSLA and the macros in 2023?

 

[vikings123]

I get the demand concerns but can the market not crucify Tesla without seeing the actual numbers? All this QQQ and NDX have not even seen their recession lows. We said we don't want to see 166 broken but we are seeing what happens when a key macro level support is taken out.

If people still believe TA is nonsense they just have to look at the levels for TSLA. Very unreal what is happening to the stock even before the earnings report is out.

My guess is we will see some shorts get trapped pre market and we will hit 121. Now if we cannot break through that resistance(it was support before pre market) then I can see us visit pre market lows(115).

edit: Adding Dan's Tweet and I agree with this.

https://twitter.com/x/status/1607727589736456192

 

[juanmedina]

With the MIC insured numbers at 19-25 Dec: 8,915 I am seriously considering liquidating my portfolio at open because of margin calls, closing my underwater puts, deleverage and sell them back when we got back in a upward channel with buying momentum. The downtrend is so strong and the bad news, covid number, FUD are so strong that this stock is attracted down endlessly. I was hoping to deleverage during the Christmas rally, Nasdaq is green however TSLA manage to have bad news or FUD news everyday about production halting.

Nobody seems to be buying that stock lately.

I liquidated my parents portfolio just now per their demands.

I tell you one thing I stayed away from this forums and Twitter for the holidays and it helped my perspective and my mood a bunch. There is just too much noise right now and you don't know who is right or wrong. Some TA guys saying that we should see a relief rally to $160 and so far nothing. I need that relief rally and I am planning for it accordingly.

How is the market going to react to missing guidance? IMO meeting the consensus is most important but with the way the stock is moving will that even get the stock to move higher? Is that already priced in? Crazy times.

 

[OrthoSurg]

I liquidated my parents portfolio just now per their demands.

I tell you one thing I stayed away from this forums and Twitter for the holidays and it helped my perspective and my mood a bunch. There is just too much noise right now and you don't know who is right or wrong. Some TA guys saying that we should see a relief rally to $160 and so far nothing. I need that relief rally and I am planning for it accordingly.

How is the market going to react to missing guidance? IMO meeting the consensus is most important but with the way the stock is moving will that even get the stock to move higher? Is that already priced in? Crazy times.

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I have to take a decision to choose between 2 stories to tell my kids: « I liquidated my portfolio just before the biggest relief rally in TSLA history » or « I liquidated my portfolio just before the stock went to $60 and my account to zero »

For now I feel like going for the 3rd story: « Hey kids, do you remember the day we went skiing and had fun while the broker liquidated my TSLA? »

 

[Max Plaid]

I have to take a decision to choose between 2 stories to tell my kids: « I liquidated my portfolio just before the biggest relief rally in TSLA history » or « I liquidated my portfolio just before the stock went to $60 and my account to zero »

For now I feel like going for the 3rd story: « Hey kids, do you remember the day we went skiing and had fun while the broker liquidated my TSLA? »

Can you not liquidate half, or is that not enough to get out of margin?

 

[kabin]

At this rate it's hard to imagine TSLA not hitting sub 100. I plan to do more nibble buys there. If it bounces today I'll roll calls down to capture premium via increased IV.

 

[Discoducky]

I have until the end of today (actually, eTrade could take action whenever they want) to make a decision to continue to add collateral to the margin account (I do have others) or to do a % liquidation.

This sucks and sorry to hear the other stories as well...

 

[Max Plaid]

Not sure if I'm digging a deeper hole, but:

STO 4x 1/6 -p115 @$8.1 -> straddled with 10x -c115 @$18.1, so ifI do get put the shares, it's for a net cost of around $60 per share

STO 26x 1/6 -c145 @$1.05

Edit: sorry, typo, -c145, not -c125...