Wiki Selling TSLA Options - Be the House

[Max Plaid]

Well, unless there's a dramatic volte-face in the next 24 hours, will be letting 15x -p195 assign over the weekend - looks to be more profitable than rolling to the same strike. As I've been writing 15x weekly calls anyway, I'll double-up the contracts, although next week's premiums look pretty crap from here

Could have closed out for quite decent profits in the early pop, but of course expected it to go higher, hey ho, that's the game...

And in the meantime I'll light a candle to the gods of disinflation and pray for next week's CPI...

 

[intelligator]

Share price around 178 - I've rolled my remaining 175/165 BPS for tomorrow expiration. I'm comfortable with the idea that we'll be >175 tomorrow, but I'm not comfortable with waiting to be proven right and then get proven wrong

Three different batches of rolls. I've now got a 2x roll into next week 160/150s -- the position I like the best. I've also rolled to 170/160s for next week, and 165/155s for the week after. All with credits of decent magnitude - the strike improvement also carries a decent weekly income built in. Just not enough to buy another strike improvement (I'm sticking with the 5's for volume). If there had been enough credit to buy another $5 strike improvement I would have taken that over the income.

I didn't move as quick, DITM with 182.5/172.5 BPS for this week, above 182.5 I have lost confidence. I can go $30 wide for next week, salvage 60% of the credit by rolling for a debit, anything less, cost is 2.30, effectively 1.30 debit. I'm leaning towards taking that 1.30 loss to go to 170/140 ... but am trying to also read the commentary, whether there's a remote change that we'll be above 170 3/17. Closing the position is 5.55 , a 4.20 loss !

Options flow (where contracts > 500)

 

[LAexpress]

I've shared this thought many times over the last 10 years. In the last 2 years though, I've learned that I really do need two different thinking caps, and I need to be really conscious of which one I am wearing at any given moment, and that I'm using to make my decisions.

My first priority cap, and the one that provides me invaluable context, is my long term buy and hold investor cap. This is the one that cares about vision, strategy, and execution and does not care about share price. This cap is confident that the share price will match actual enterprise value off and on and will definitely bubble to the surface sooner or later. That could be 5 months or 5 years - whatever it is, it'll happen.

The other cap is my short term trading cap. This cap is concerned with short term company news, macro news, economy, inflation, technical analysis, and such like. The other cap provides some context, but the connection between vision / strategy / execution is effectively zero. Or at least I need to treat it as zero, because there are enough other traders that treat it as zero.


The overlap in these two arrives in the long dated options. Long dated are 2+ years at open, not the 6-12 month options. The price can be irrational for an entire year, or at least most of a year, and that's why I put those 6-12 month options into the short term bucket.

I totally agree with your sentiment. Additionally, if you get a 6 or 12 month option you must have a plan to get off of the quarterly date. i expect we don’t see any significant upward move until we are past the March quarterly date coming up soon.

 

[dl003]

Im holding my short puts. No reason to close them yet. Lets see the close. It took SPY 390 for TSLA to violate 176 in a meaningful way. Daily supports require a daily close to confirm a trend reversal.
I've been rolling them down since yesterday and earlier today as price action pointed to further downside. Whether I close them now means very little to my P/L. Majority of the profit has already been made and loss already been avoided. Once the target had been reached, my plan was to watch the close before deciding whether to further reduce my exposure or not.

 

[EVNow]

I'm finally out of Wash sale timeout. So, STO P182.5 - can take the shares if SP falls well below that (or roll if not DITM).

Hmm ... roll or take shares ? I guess roll ... not in DITM range yet.

Seems to me if SP is going to 160/150, that would be the price range to re-enter. Further if we go to 110 or so. convert shares to LEAPs.

 

[SpeedyEddy]

Rolled -C175 to -C160 for next week. Tomorrow could be a bloody friday. (I am really short term bearish as you have already understood. Strange things can happen, like it did before, nothing being wrong fundamentally with Tesla)
Dead cat bounce came too late, to close >175?

 

[dl003]

Out of my short puts. Haven't opened any new short calls, though. We might still bounce a bit to squeeze out late bears but it's officially a STR market in TSLA for me.

 

[juanmedina]

Out of my short puts. Haven't opened any new short calls, though. We might still bounce a bit to squeeze out late bears but it's officially a STR market in TSLA for me.

What is STR market?

 

[dl003]

What is STR market?

Sell the rip. Time to get defensive.

 

[EVNow]

Im holding my short puts. No reason to close them yet. Lets see the close. It took SPY 390 for TSLA to violate 176 in a meaningful way. Daily supports require a daily close to confirm a trend reversal.

Oh well ... brutal day.

 

[Max Plaid]

Oh well ... brutal day.

Don't think the one day was the issue, but that's what, four in a row -3% or more, and befuddling to us given that Tesla seems to be in a very strong position right now, other than the usual FUD it has been a flood of good news recently, so yeah, disconcerting

I do wonder if the bears are playing the put/reverse-gamma game again? Surely there won't be so many loaded-up on margin this time around

 

[Max Plaid]

Sell the rip. Time to get defensive.

So you mean short the stock, effectively, buy puts and/or sell calls, right?

I'm certainly not selling puts from here, that's for sure, in fact now I have some July -p250's that had loads of extrinsic that now become at-risk - all cash-covered, of course, and with a fat premium when I sold them, but could live without them assigning...

 

[dl003]

So you mean short the stock, effectively, buy puts and/or sell calls, right?

I'm certainly not selling puts from here, that's for sure, in fact now I have some July -p250's that had loads of extrinsic that now become at-risk - all cash-covered, of course, and with a fat premium when I sold them, but could live without them assigning...

For me it's going to be sell calls aggressively at resistance and avoid selling puts until [insert arbitrary and made-up reversal signals].

 

[Max Plaid]

For me it's going to be sell calls aggressively at resistance and avoid selling puts until [insert arbitrary and made-up reversal signals].

Essentially my plan too, can do 30x weekly without too much sweat... 15x sacrificial, 15x to be rolled if necessary, which is also comfortable

Working out which strike will be the challenge

 

[gabeincal]

Surely there won't be so many loaded-up on margin this time around

Why not? Surely everybody wants to gain back the huge losses of 2022, no? Using leverage would help with that…

 

[Jim Holder]

Essentially my plan too, can do 30x weekly without too much sweat... 15x sacrificial, 15x to be rolled if necessary, which is also comfortable

Working out which strike will be the challenge

I totally agree. We should share strikes/expiration for any -Cs to crowd-source our findings here so we can benefit each other.

If TSLA hangs around $170 range tomorrow, what are some “safe” but not premium-poor strikes/DTE being considered?

 

[bingoz]

Why not? Surely everybody wants to gain back the huge losses of 2022, no? Using leverage would help with that…

I dont think people forgot the Nov/Dec pain that fast.

 

[juanmedina]

I agree about the margin comment... I think retail got scared straight in December.

Any thoughts about shorting NVDA as a hedge? Or buying TSLQ ? I am curious about what calls are you guys planning on selling. I might sell Jan 2024 $250 or $280's although they are worth garbage right now. $280's were worth $32 on February 16th, lame.

 

[vikings123]

it's a daily support so it has to close the day below it. Intraday violation doesn't mean broken to me.

Agreed, very important how we close today. I meant to post this earlier but now that we closed at the lows it’s time to get defensive like you said.

I totally agree. We should share strikes/expiration for any -Cs to crowd-source our findings here so we can benefit each other.

If TSLA hangs around $170 range tomorrow, what are some “safe” but not premium-poor strikes/DTE being considered?

not advice and I have definitely been wrong many times. But the way I look at it:

1. TSLA in uptrend: Be aggressive with buying LEAPS and sell puts aggressively at the beginning of the uptrend. If you have to sell calls in an uptrend just make sure they are at least 20% out weekly calls. Don’t sell puts if you feel like the momentum has flipped or the stock is stalling out.
2. TSLA in downtrend: Be aggressive with selling covered calls even 5% OTM and avoid selling puts. Don’t roll especially when macros are in deep *sugar*.

I think there’s usually plenty of clues when the trend changes, most notably the options market and negative news getting recycled. Up until Tuesday of this week we did not see any big options bets. It is ridiculous how TSLA respects levels.

Now for tomorrow it is possible we drop to the 164/165 level which is the 50 day moving average. In general look at the 50 day as the line between bulls and bears. Anything below be very cautious. If not tomorrow we will likely hit that level next week and we could bounce or if macros are bad then look out below. So yes the 50 day is HUGE!

 

[SpeedyEddy]

I dont think people forgot the Nov/Dec pain that fast.

Indeed, so now they (we) won’t -P into oblivion