Wiki Selling TSLA Options - Be the House

[CrunchyJello]

Sorry to bring this up but can someone send me a link or tell me what happened? Thank you.

Peter my husband took his own life

Peter Zakrzewski was very active on this forum. I saw him reading lines from this for years. He made millions on the back of those Wall Street sharks with the shorts. But he kept at it and lost everything. He took his own life on December 21 by jumping lions gate bridge in Vancouver head...

teslamotorsclub.com

 

[GrmMastrDoobie]

What's the cosensus on the CPI? Catalyst, or stock price crusher?

 

[corduroy]

One thing I'm thinking about. If some of you went from 100s of thousands of dollars to a couple of million. Why didn't you guys put some in a "safe" world-wide ETF and just enjoy dividends for that part of your portfolio?
It's not like that at the moment, but I plan balancing my portfolio near 25% TSLA, 25% World-wide ETF and 50% cash (for options or opportunities).

I think another problem was, most of us considered TSLA "safe". We all learned that is definitely not the case. The company might have a bright future, but the stock is another story. It can disconnect from the company performance and stay that way longer than we can stay solvent.

I think your advice is good for the future. Don't over allocate in TSLA, hold safe div ETFs, and cash. There are a lot of solid ETF's that pay north of 10% divs monthly. No stress, just invest and never look at the SP again, while collecting monthly income. For example, if you put $1M into something like QYLD or JEPI, that's over $10K/month in worry free income. I hold both of these and will continue to add.

 

[BornToFly]

I can't decide, with CPI Thursday, if I should close my 125CC for break-even.... I think we might rally back today to at least yesterday's close.

 

[Cherry Wine]

I can't decide, with CPI Thursday, if I should close my 125CC for break-even.... I think we might rally back today to at least yesterday's close.

It's a tough call. Regarding CPI, I think some of even a good print is already priced in with this recent rally. But does it come in even colder than expected (or does meeting expectations remove uncertainty) and we rally into earnings? Or, even if the print is good, is this a buy the rumor, sell the news type event?

I split the difference and rolled my $125s up to $128 to get a little extra breathing room, but still be positive on the week (assuming I can close them for close to nothing).

 

[BornToFly]

It's a tough call. Regarding CPI, I think some of even a good print is already priced in with this recent rally. But does it come in even colder than expected (or does meeting expectations remove uncertainty) and we rally into earnings? Or, even if the print is good, is this a buy the rumor, sell the news type event?

I split the difference and rolled my $125s up to $128 to get a little extra breathing room, but still be positive on the week (assuming I can close them for close to nothing).

I did 125CC on 1/3 of the available shares. So I have 2X the number I can use to "rescue" them should they need rolling (I don't know if that is enough). I definitely don't want to roll anything to earnings week, just in case there is a big rally from being so oversold.

 

[CrunchyJello]

One thing I'm thinking about. If some of you went from 100s of thousands of dollars to a couple of million. Why didn't you guys put some in a "safe" world-wide ETF and just enjoy dividends for that part of your portfolio?
It's not like that at the moment, but I plan balancing my portfolio near 25% TSLA, 25% World-wide ETF and 50% cash (for options or opportunities).

I cannot imagine risking margin calls as often as others here,
and don't want to even think about Peter's situation. RIP Peter.

With a modest portfolio, I am very interested in balancing that risk/reward,
and moving towards monthly covered strangles on fairly common stocks
including AMD, AAPL, AMZN, DDOG, META, NIO, SHOP, TSLA, etc;
basically hammered stocks lol - get in at the bottom if possible, right?

My last trade was (Feb17) AMZN with an -80p and -100c for $450.
Similiar play with the other tickers; scaling up with the tickers I like more.
I will happily either take assignment & sell 2 CC's,
or start another round with either a near ATM put or a buy/write.

Running a boring trade (with minor adjustments) keeps the stress manageable.
Peanuts for most here for sure, but with my minimal needs,
I prefer to steer away from unnecessary stress; 2-3-4% monthly is quite adequate.

A simple life may not everybody's goal, and that's ok - everyone is free to choose.
My goal is to live comfortably and help my extended family, both financially and in person.
The acid bath of 2022 and the stories of lost lives / fortunes is a wakeup call that I will not ignore.

Rambling; time for M*A*S*H - here's to peace and a prosperous 2023 for all!

 

[BornToFly]

I am a big chicken now. I rolled the 125CC to 128 for Friday. If there is no CPI rally, I can roll back down to scalp a little of the premium I lost back, and I can sell additional CCs with 2DTE if it looks safe after Thursday morning.

Edit - Of course the SP goes down right after I do it....

 

[vikings123]

I can't decide, with CPI Thursday, if I should close my 125CC for break-even.... I think we might rally back today to at least yesterday's close.

Good call so far. I honestly don't know how much a low CPI will help TSLA. From my vantage point I feel like we are struggling to gain any sort of momentum and this is likely to continue until we see the numbers. I just get the feeling most institutions are staying on the sidelines for commentary on margins and/or 2023 guidance.

Could we potentially break the Pre P&D highs of 124? I think so. But until that happens I plan to leave my CCs open.

 

[OrthoSurg]

Greed is the answer. I always thought Tesla would not go down this much. I have learned the hard way that relying on one stock is not feasible. If and when the stock goes up eventually I will diversify a lot and buy VTI or something like that.

I just saw the news about Peter and I was in shock. He always answered my questions and I follow some of his trades and made money because of him, RIP. Please this be a lesson to all of us; I know we still believe in Tesla long term but take some chips of the table when it makes sense to you for the sake of you and your family. Life is not just about money. I myself look forward to day that I move my investments to index funds and stop trading. Hopefully one day Tesla pays dividends and becomes a more drama free company like Apple in the future.

The only goal I have achieved right now is learning to teach my kids what not to do. I don’t know if they felt my constant stress of answering the phone with the broker asking me for more money in my account however for Christmas my 3 older boys all pooled their money I was giving them last year for working in the house or helping to bring wood in the house or different tasks and they gave me $256 (all their cash money on hand) in the pencil case they kept their money in and said it was to help me with my financial problems.

Seeing my 10, 8 and 6 y.o boys pooling their money to help their dad was the most heartwarming gesture I have had on the 24th of December.

They sure made me smile because that didn’t cover the $150k margin call I received from my broker the next office day. Haha. Love my kids so much. The smile on their face thinking they were solving all of my problems was priceless. Next time I have 5M in my brokerage account I cash it all and give it to my boys so they can really help me the next time I f$&!up big time.

 

[bballshinobi]

One thing I'm thinking about. If some of you went from 100s of thousands of dollars to a couple of million. Why didn't you guys put some in a "safe" world-wide ETF and just enjoy dividends for that part of your portfolio?
It's not like that at the moment, but I plan balancing my portfolio near 25% TSLA, 25% World-wide ETF and 50% cash (for options or opportunities).

I didn’t want to pay short term CG tax which would amount to about 50+%, as a lot of my shares and call options were still on short term basis.

However, now I realized what I could’ve done is sell ATM covered call and buy ATM puts, then wait until the shares reaches long term basis and exercise the put.

Oh well, you live and you learn. I also believed and still believe TSLA will reach higher than $400 anyways and was willing to live with the drawdown given that I can still generate income with selling options. It still sucks though lol.

 

[Jim Holder]

https://twitter.com/x/status/1612888385462407212

 

[EVNow]

STO 01/13 $110 P's for $1.25 each this morning.

I'm not so brave ... sold 103/98 spread.

From trying to get $5 a contract last year, I'm now down to be happy with 30 cents (I guess thats like 90 cents pre-split).

 

[Max Plaid]

Orthosurg's problem is mine to a lesser extent as well.

Even with long term capital gains at 23.8%, I also have the state and city to worry about which brings me to 36% or so tax rate. Meanwhile I was sitting on HUGE capital gains, so large that I considered renting luxury in Florida for a year just to sell stock, but there was no way in the end. I have businesses and a family.

I could have sold and just paid the taxes. I knew it was overvalued at 400. I sold CCs like mad at the time. But I did not want to sell stock as I still believe that Tesla is on the way to a multi trillion dollar valuation. Just needs some time. So now I have to believe that I will sell at 400 and pay the 36% on what was 90%+ profit so I could time the market and rebuy. Which means I would have to rebuy around 270 JUST TO BREAK EVEN on the shares that I was then holding.

SO the SP goes down to 270. It still looked toppy. OK, sell at 270 to, buy back at 180 to BREAK EVEN.

An so on all the way down. I tried to monetize the position through playing the house, but obviously I did this badly.

When I read about countries that simply have a small asset tax like 0.15%, I am jealous at the thought of being able to liquidate in times of uncertainty with no consequences.

Don't believe that Belgium has no capital-gains tax (the 0.15% is on the unrealised portfolio value above €1m, you pay it regardless) - for personal portfolios the principle is that capital-gains are tax-free, but speculative trading might be considered to be taxed at 33% and if you have no other source of income, might even be considered "professional income" and then you could pay up to 70% of realised gains. But the only rule is that you must be seen to be acting "sensibly", as a "good housefather" and how you determine that is purely subjective - even having all your assets in TSLA might be considered "speculative" by the authorities and they could decide to tax you, just because they feel like it. Options are almost always considered speculative, except maybe, if they're a small %age of your total assets, maybe, maybe not, nobody knows until they look at it and decide. It's a terrible system and open to abuse from both sides.

 

[SebastienBonny]

Don't believe that Belgium has no capital-gains tax (the 0.15% is on the unrealised portfolio value above €1m, you pay it regardless) - for personal portfolios the principle is that capital-gains are tax-free, but speculative trading might be considered to be taxed at 33% and if you have no other source of income, might even be considered "professional income" and then you could pay up to 70% of realised gains. But the only rule is that you must be seen to be acting "sensibly", as a "good housefather" and how you determine that is purely subjective - even having all your assets in TSLA might be considered "speculative" by the authorities and they could decide to tax you, just because they feel like it. Options are almost always considered speculative, except maybe, if they're a small %age of your total assets, maybe, maybe not, nobody knows until they look at it and decide. It's a terrible system and open to abuse from both sides.

Yes, it’s like you say it is. They may tax you at 33% if speculative, but it’s a grey area and very difficult to determine a profit when trading options. Also: what is trading a lot? If it’s not determined, how can one know?

This rule is about stocks, can we consider derivatives the same?

Edit: did some research. Selling stock like once a year doesn’t seem an issue to me.
Trading options is excluded from taxes, because those are considered contracts, no stocks.
Selling calls against shares you have to do some covering could be considered as a good housefather, while doing it against bought calls could be considered as speculative.

 

[adiggs]

I'm continuing to sit out with no short term positions. I intend to remain in this state until after the January monthly expires. Too much volatility with too many big positions tied up in that expiration, and its bitten me before.

I might return after that expiration and before earnings - I may also just wait for the week after earnings before returning.

 

[mrmage]

Orthosurg's problem is mine to a lesser extent as well.

Even with long term capital gains at 23.8%, I also have the state and city to worry about which brings me to 36% or so tax rate. Meanwhile I was sitting on HUGE capital gains, so large that I considered renting luxury in Florida for a year just to sell stock, but there was no way in the end. I have businesses and a family.

I could have sold and just paid the taxes. I knew it was overvalued at 400. I sold CCs like mad at the time. But I did not want to sell stock as I still believe that Tesla is on the way to a multi trillion dollar valuation. Just needs some time. So now I have to believe that I will sell at 400 and pay the 36% on what was 90%+ profit so I could time the market and rebuy. Which means I would have to rebuy around 270 JUST TO BREAK EVEN on the shares that I was then holding.

SO the SP goes down to 270. It still looked toppy. OK, sell at 270 to, buy back at 180 to BREAK EVEN.

An so on all the way down. I tried to monetize the position through playing the house, but obviously I did this badly.

When I read about countries that simply have a small asset tax like 0.15%, I am jealous at the thought of being able to liquidate in times of uncertainty with no consequences.

I hung on too long for taxes as well. My silver lining was that I closed a small spread on Dec 31, 2021 that was near expiration. As everyone here knows, the gain/loss on both legs can be huge even though the combined value is small. For example, a profitable $20k transaction might have a long leg of +$10.01M and short leg -$10.99M.

What I didn't know was that closing the long call is recognized immediately (giving a massive profit for 2021), but closing the short call takes a few days to settle. That meant that I had a huge tax bill for 2021. I was really upset at liquidating a good chunk of my portfolio for taxes last April at the ridiculously "low" SP of $300.

The huge loss booked in 2022 was equally fortunate. Now I could sell stocks and shares without worrying about capital gains, so I didn't worry as much about liquidating when I deleveraged from margin, options, and shares.

Although I'm down about 80% from the high, the remainder is mostly tax free. Obviously a very happy outcome compared to what could have happened. Making lemonade I tell ya.

 

[Oil4AsphaultOnly]

I'm continuing to sit out with no short term positions. I intend to remain in this state until after the January monthly expires. Too much volatility with too many big positions tied up in that expiration, and its bitten me before.

I might return after that expiration and before earnings - I may also just wait for the week after earnings before returning.

I've been selling a few CC's, but am mostly sitting out as well. Waiting to see if Moody's upgrades the credit rating after the earnings call? Also, wouldn't any significant upswing also compound with any S&P index rebalacing in march? Those are the catalysts that I'm looking for, since they would bring in fresh institutional buyers. I think retail's pretty much all in.

 

[ReddyLeaf]

I'm continuing to sit out with no short term positions. I intend to remain in this state until after the January monthly expires. Too much volatility with too many big positions tied up in that expiration, and its bitten me before.

I might return after that expiration and before earnings - I may also just wait for the week after earnings before returning.

Everyone should heed adiggs’ sage warning. I’m still holding my 1/13 straddles -p120s/-c120s, a few 1/13 -p115s/-c125s strangles, and a relatively large 1/20 -c110s position as a hedge against a massive SP test of the p100 wall (I’m not expecting this, just got frustrated at the market awhile back and decided to hedge). I expect the SP to stay near MaxPain this week (about $120), and plan to close everything out on Friday because of the higher uncertainty around this LEAP expiration and upcoming financials. Probably a great time to SELL options for the IV crush, but I worry about the risks. My crystal ball is too uncertain to risk anything for next week and beyond.

Yesterday, I did a small experiment on timing the market, following adigg’s method of selling calls or buyback puts on an up day, and doing the reverse on a down day. It worked very nicely; yesterday selling the -c120s and closing a 90/95 BPS, while this AM selling some -p120s for $6.20 (not exactly the $6.90 high, but $4 better than if selling it yesterday alongside the -c120s. I will try this again in the future if I can keep patience and available cash/shares.

BTW, can anyone explain or point to a reference on how to use the published theta numbers to estimate future SP? For example, earlier today ATM theta was about -0.61 for Friday, 3 DTE. Does this mean (all other things equal) that we should expect $-0.61/d x 3d = $1.83 loss? Since the ATM options prices were near $4.00 today, does this mean that there should be about $2.17 value left early Friday ATM? The numbers don’t really work for me, even though I understand the basic concept of the Greeks. I still think that IV is the great fudge factor that the MMs use to fleece everyone playing the options market, but that’s another story.

The SP graph is still ugly, we’re still in a Bear Market, the FED is still raising rates, recession, lots of options expiring, and uncertainty about the financials. Yesterday’s failure to break $125, even on a Monday, suggests another test of $100, maybe even $95 if some “bad” news or FUD miraculously comes out. We still have CPI and more FED speeches. Be careful out there, don’t over leverage, plan for and expect the worst, hope for the best, and be happy when something in-between happens. GLTA.

 

[intelligator]

Another positive gamma exposure day, 115p and 120c have the most interest, slightly more to the upside. Speaking of hedging, I still have the Sep '24 290 CSP that has very little time value left, will get ugly should we slide down to the low hundreds. I have to make a move tomorrow to avoid having shares put to me which would then trigger a wash sale invalidating a tax loss for 2022. I didn't move on it anticipating we were near bottom and that I could ride this out to February 2nd or 30 days out... thereafter I'd not care if shares are put to me at a high cost basis. I'm not feeling it... GLTA.