Wiki Selling TSLA Options - Be the House

[Max Plaid]

How are you playing the upcoming earnings? Has WS analysts adjusted earnings estimates on the lower P&D numbers? Or are the odds of a slight miss or slight beat larger than the odds of a large beat of the consensus? Anyone selling close CCs, buying protective puts before? Anybody buying calls because they are bullish?

Everybody staying out like @adiggs?

For my part, STO 26x 1/27 -c130 @$7.2, straddled with 10x -p130 @$6

The number of times I've seen bad earnings tank the stock and good earnings tank the stock, impossible to predict the SP even if you knew the EPS ahead of the event, so I play it even, then roll as necessary

 

[intelligator]

Have a couple of BPS in the mix. I am experimenting with selling them ITM. For example sold a 140/125 for next week for 8. Max loss is 8.

Always learning but can't put this one together. How is max loss calculated to be 8, pls... it's not clicking for me

EDIT: Thanks for the example @traxila , I see it now in the trade window. In my case, I can't risk having shares put to me until I get out of wash sale jail.

 

[Yoona]

For my part, STO 26x 1/27 -c130 @$7.2, straddled with 10x -p130 @$6

The number of times I've seen bad earnings tank the stock and good earning tank the stock, impossible to predict the SP even if you knew the EPS ahead of the event, so I play it even, then roll as necessary

still learning straddle management... i am assuming 26x is covered by stock and you are ready to buy 1000 shares?

 

[traxila]

Always learning but can't put this one together. How is max loss calculated to be 8, pls... it's not clicking for me

Now the max loss is reading slightly different, but it was around 8 when I made the trade.

 

[Max Plaid]

still learning straddle management... i am assuming 26x is covered by stock and you are ready to buy 1000 shares?

Yeah, the 26x is covered by my lower-cost-basis shares, wouldn't really want to sell them at this price, but as it's only 20% of my possible contracts, it's also easy to roll them up and out a week, a month, whatever, and still be able to write at higher strikes

For the puts, well I wouldn't want to buy more shares, TBH, I have a lot already, but just 10x is easy to manage and I'd keep writing the 26x -c130's if the SP were to close below

Main learning from the last year, as I probably mentioned once or twice already, is to keep plenty of wiggle-room, plus I enter every position with the assumption that it will go against me, so I've already got my escape-plan ready before I write it

And yeah, Plan Z is to let either side exercise, wouldn't be the end of the world either

 

[UltradoomY]

Now the max loss is reading slightly different, but it was around 8 when I made the trade. View attachment 897896

This is not correct - the premium received was $8 per contract and the max loss is the premium / minus spread width.

I just opened this (and not my first time doing an ITM BPS) you take the spread width x 100 and subtract premium x 100 for total risk.

Which in this case is $1500 per spread - you risk losing an additional $700 per spread along with your premium gained.

Soooo, there's that.

I liked it because I can see us popping on Monday or Tuesday (barring any bad news over the weekend) and I can close this for less than the $8.20 I received for opening each one.

 

[traxila]

This is not correct - the premium received was $8 per contract and the max loss is the premium / minus spread width.

I just opened this (and not my first time doing an ITM BPS) you take the spread width x 100 and subtract premium x 100 for total risk.

Which in this case is $1500 per spread - you risk losing an additional $700 per spread along with your premium gained.

Soooo, there's that.

I liked it because I can see us popping on Monday or Tuesday (barring any bad news over the weekend) and I can close this for less than the $8.20 I received for opening each one.

Sorry for rhe aggressive rounding.

Got 8, spread is 15, max loss should be 7?

All the best!

 

[Max Plaid]

BTC 26x -c130 @$2.85 net +0.25 - it's profits, I guess, couldn't sit there hoping for an end of day selloff!

Of course I could have bought these back yesterday for 50c, dumb-ass that I am...

But it's a winning trade, has to be said!

 

[cbh03]

BTC 26x -c130 @$2.85 net +0.25 - it's profits, I guess, couldn't sit there hoping for an end of day selloff!

Of course I could have bought these back yesterday for 50c, dumb-ass that I am...

But it's a winning trade, has to be said!

With hindsight, I'm kicking myself for not closing some of my 1/27 140 and 150 CC's yesterday. I'm surprised that we didn't close under 130 today given the relatively low volume.

 

[Max Plaid]

With hindsight, I'm kicking myself for not closing some of my 1/27 140 and 150 CC's yesterday. I'm surprised that we didn't close under 130 today given the relatively low volume.

Yep, I was "absolutely certain"* we'd close below 130 given the previous red days, but nope, same as last week, closed above - MM's/Hedgies/Wedgies defending puts more than calls it seems...

* I note that it when I'm "absolutely certain" of a the stock doing this, or that, are the times where I make poor decisions... take the 80% profits folks, you'll never lose money doing that every time

 

[OrthoSurg]

Yep, I was "absolutely certain"* we'd close below 130 given the previous red days, but nope, same as last week, closed above - MM's/Hedgies/Wedgies defending puts more than calls it seems...

* I note that it when I'm "absolutely certain" of a the stock doing this, or that, are the times where I make poor decisions... take the 80% profits folks, you'll never lose money doing that every time

Yes like my 13/1 120CCs I sold 4/1 to cover for a margin call in case of a drop in the 100s. Could have closed them the next morning for a 50% profit however I would have had to open a new position to cover for a margin call or sell LEAPS. Instead of that I rolled to 17/2 140CCs. Now will have to roll these for the rest of my life it seems. I prefer to roll these endlessly that to face margin calls and lose my shares on the lowest.

 

[vikings123]

Yep, I was "absolutely certain"* we'd close below 130 given the previous red days, but nope, same as last week, closed above - MM's/Hedgies/Wedgies defending puts more than calls it seems...

* I note that it when I'm "absolutely certain" of a the stock doing this, or that, are the times where I make poor decisions... take the 80% profits folks, you'll never lose money doing that every time

I will just say take profits on partial positions for example close 50% at 50% gain, another 25% at 75% gain and leave the rest until expiry. It doesn’t have to be all or nothing.

 

[CHGolferJim]

Yes like my 13/1 120CCs I sold 4/1 to cover for a margin call in case of a drop in the 100s. Could have closed them the next morning for a 50% profit however I would have had to open a new position to cover for a margin call or sell LEAPS. Instead of that I rolled to 17/2 140CCs. Now will have to roll these for the rest of my life it seems. I prefer to roll these endlessly that to face margin calls and lose my shares on the lowest.

Most likely if you keep rolling a week at a time to stay OTM you’ll eventually be able to escape on a dip. Although I wonder how often we’ll have significant dips if we get into a 50+% annual gain scenario which we might for multiple years as TSLA and growth stocks come back into favor.

 

[BornToFly]

I have 155, 160, and 162.5CC for next week in different accounts. 2/3 of shares in each account free of any CC, so I have power to roll up by tripling the number if necessary next week.

 

[OrthoSurg]

Most likely if you keep rolling a week at a time to stay OTM you’ll eventually be able to escape on a dip. Although I wonder how often we’ll have significant dips if we get into a 50+% annual gain scenario which we might for multiple years as TSLA and growth stocks come back into favor.

My other option is to roll out at 400 for Jan2025 then roll back in when we have a reversal.

 

[JustMe]

Are we seeing a rising wedge on the daily chart? I'm no chart expert, so interested in others' thoughts.

View attachment 897868

Kinda, but we’re not seeing the falling volume that would signal a potential reversal coming. If that were to happen, I’d expect a fall to $116-$118 level within a day or two. But I think the ER will supersede any of this.

My gut tells me we will be over $145 or below $110 this time next week . I feel like this will be the most impactful ER in years. (Cautiously optimistic though )

 

[ReddyLeaf]

I’m still holding 130/131/132 straddle/strangles for both today and 1/27. I wasn’t planning for these to be ATM this afternoon, but it’s ok, just means that I need to watch them closely near market close. I overslept and missed the 1st hour of trading. Oops. I’ll probably roll today’s to 1/27 as well, maybe targeting 132-135. Still not sure whether to close before earnings or hold through the IV crush, but will probably hold if SP is below my strikes. Edit: Options action suggests SP will deadstick land at $130+/-0.10 today.

Definitely missed guessing the ending SP today. Also, probably a mistake, but rolled everything to 1/27 -p130s/-c135s. Net premiums were about $3.50 on the CCs and $5.20 on the CSPs. Added another 10 shares yesterday for good measure, plus generated enough cash premium from the roll to fill out another CSP. I’m still weighted too heavily on CCs, still about 3:2. FWIW, I’m seeing about $0.80-$1.00 decay daily on ATM straddles. Since I only need less than $1/wk premium for living expenses, I’m still really taking too much risk and should close these before earning. I think it’s a small sign of maturity that I’ve moved from ATM straddles to tight strangles. Maybe next week I will widen out another $5 to -p130/-c140, or something similar. Looking at MaxPain, even -p120/-c150 could generate $1.80+$1.45. Still feels like I’m in accumulation mode, hence the continuing ATM efforts. Such is the risk/reward game we play. GLTA.

Edit: From the perpetual investor thread, link to brokerage statement for “investor” claiming harm from Elon’s infamous 420 tweet. Those are some serious options plays. Wow.
https://files.cand.uscourts.gov/fil...Exhibit 0524 - Littleton Broker Statement.pdf

 

[Max Plaid]

I will just say take profits on partial positions for example close 50% at 50% gain, another 25% at 75% gain and leave the rest until expiry. It doesn’t have to be all or nothing.

Yeah, this isn't something I tend to do, but given the relatively large number of contracts, it's something I should consider for the future

 

[Max Plaid]

Edit: From the perpetual investor thread, link to brokerage statement for “investor” claiming harm from Elon’s infamous 420 tweet. Those are some serious options plays. Wow.
https://files.cand.uscourts.gov/files/18-cv-04865-EMC In re Tesla Inc. Securities Litigation/Trial Exhibit 0524 - Littleton Broker Statement.pdf
View attachment 898038

You think? Looks like call-spreads to me and there some here were playing more than that in 2021

 

[ReddyLeaf]

You think? Looks like call-spreads to me and there some here were playing more than that in 2021

Hmmmmmm. Now I know why there was a lot of angst selling BPS in 2022. My max risk level was triggered when I sold 5x BPS/BCS/IC.

In other news, lots of articles about US debt limit reached, and potential effects on market/macros, highlighting the importance for us. Macros likely to continue the bear market in short term.

The debt ceiling has been raised 45 times in the last 40 years. And while past debt ceiling crises have roiled markets — the S&P 500 shed 17% in 2011 — their effects haven't lasted long.

"This is not going to significantly damage the credit rating of the U.S. over time, and it's not going to derail stock markets," says McMillan.

Perhaps, that’s why this guy closed his TSLA trade (only $15 gain on 200 shares, so minuscule) and is still 100% cash and hedged short. I’ve been impressed with his analysis (mostly short-term TA) and have linked his stuff in the past, although he overuses the word “massive.”