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Wiki Selling TSLA Options - Be the House
- Thread starter adiggs
- Start date
Guys, i dont know what to do. My average price is 297/share. I have 3200 shares of TSLA...
for now i am just selling OTM covered calls but im just stuck holding on to my losses
any advice or suggestions?
for now i am just selling OTM covered calls but im just stuck holding on to my losses
any advice or suggestions?
EVNow
Well-Known Member
My avg price is also something like that. I'm fine with being underwater for a year or two. I just sell CC, call spreads or put spreads (or puts). Recently I also let CC get exercised for tax loss harvesting. Yet to re-enter ...
There are a LOT of people in the same boat.
My advice would be, be careful with selling calls, especially since premiums on short term calls are shitty. Bear in mind the delta of the calls you sell according to the volume of shares you have. Even OTM calls can quickly get ATM or even ITM. Then delta and gamma explode.
Maybe consider buy bull put spreads on your position. You receive better premiums than selling covered short calls.
Depends whether you need cash in the coming years or not. Long term (5+ years) I think all will be fine, short term I'm rather bearish (6 months), medium term (between the two), no idea....
Tesla dropped the ball in Q1 and TSLA pays the tab. Will CT, Highland, Gen3, Model 2 pick things up before end 2023, I really don't know
the tesla shares are long term holds since 2019 in my retirement accounts. I left a lot of money on the table by not selling at $400 and now just sucking on these paperlosses from the top. I am thinking in terms of opportunity cost compared with investing in a diversified portfolio like index funds vs TSLA. I dont need income nor with trading provide any tax hit, all roth and IRA money
thank you
I will consider this
selling covered calls is indeed almost not worth it compared to the risk that I am taking. I usually sell 30% OTM 30 days expiry and try to sell for a $1 per contract. I have had luck with making money on these, avoiding the rocket ships in between when selling calls
I think the stock is going to keep dropping until Q3 since Q2 numbers are going to be abysmal. If you’d like to cut your losses, now may not be a bad time to sell some shares. You can buy back in after Q2 earnings. This is a risky move though, since there’s always a chance of some surprise announcement between now and then such as interest rate cuts stoking demand or Tesla pushing out Cybertrucks sooner than planned. So proceed with caution.
It may be a little bit late now but you can still try it if you are willing.
On one of my accounts the average price was in the 220's so I sold about 15% of the shares at around 175 (and put the cash into QQQ). Then I started selling fairly close OTM Puts around the 160-165 range. To try to "time" buying in at a lower price. This'll help offset some of the opportunity cost you feel you are losing. If TSLA trades in a range and you sell fairly tight OTM puts (or calls if you get assigned) you could definitely get better returns on the money than an index fund.
In the off chance I am wrong, I don't mind my 15% position losing out on the rocket. I would love the other 85% to enjoy a nice trip back up into the 300's.
I made a post a week or two ago saying I strongly believe we'll be stuck in a trading range, so if you want to make money on this stock right now, the best way is to sell calls/naked calls expiring before Q2 P and D at $200-225 strikes. Or sell your shares and try to get allocated by short puts (or just try to time a lower price) but this is harder as when I made the post TSLA was trading in the high 160's or 170s I believe.
willow_hiller
Well-Known Member
Interesting thread on how the next Fed announcement on Wednesday may not include the eventual pivot that markets are expecting. The long story short is that Powell is likely to want to follow in Volcker's footsteps and avoid associations with a 1970s Fed chair that failed to curb inflation by pivoting when unemployment rose:
I read this last night as well, good thread - very thorough and makes sense.
This in addition to the data from the "prank call" with Powell and Zelensky makes me sure that they are going to raise rates now (I know I said pause 2 weeks ago but new data, new mindset)
Just not sure how the market reacts, so far the market has been saying that they don't believe Powell and the Bond market is in the same camp.
Maybe buy some really cheap OTM Puts on the SPY about 6 months out and see what happens for insurance?
I think the market is 50/50 between a pause/.25 right now. Even though .25 is not too bad, but it will be all about the rate projection in the upcoming months.
September 15th $400 SPY Puts - $10.63 each this morning. Only got a handful as this is a hedge.
Cheers!
On topic - my $160 P/C straddle is looking good so far today. After burning some theta over the weekend.
EVNow
Well-Known Member
There is zero reason to cut rates this year (unless we see a huge dip in economy). Infact I don't think he will even say this is the last rate cut. He will just say they will do what data tells them.
BTW, why do people keep talking about Powell, as if he is the sole authority ? Doesn't it go by the vote and majority can out-vote Powell .... much like chief justice in Supreme Court ?
dc_h
Active Member
There is usually no more than one dissenting vote on the Fed. They do a lot of debate and discussion of the data before the vote. I think they should hold, but the .25 change is likely. The fed tends to over shoot, but in part it is needed. Businesses will keep going for higher margins until the fed drives us over a cliff. I don't see a lot of evidence of my supply chain saying, we will give you 5% back, we went too far.
As far as options go, maybe those 150 CC's are still in play. Really on the fence about selling some 167.50 calls. Already have 10 165 for Friday, rolled from last week, up from 160.
SpeedyEddy
Active Member
$159 (= 50% fib (of recent rise to $217.65) that was broken last week,) is now being tested as support. Better late than never.. Moves this week are indeed all in Fed's talk. I really hope that "one raise and then longer that high" is more baked in then we think and al doomsayers are wrong this time.. There are a lot of those and statistics seem to be on their side. (IV talks the same language).
So my belief is somewhere else. One leg down still to go fill at least the biggest gap-up from 144. Closed my calls on a little profit. Only -P95 for 2025 left and some SPY -C for this week (394.... hope to lose them break even at 11 dollars on/after wednesday). Plus some MSFT -C320 june '16.
And all these stocks that need some watering....
Might I be right in a month (144 or lower in exactly five weeks) and @dl003 too (250 later this year): I will on betting on both deeply to get me a new model Y LR by end of the year, only costing me around the €28.000 that I hope to get for my MODEL 3 in june. Just have to deal a few months with no car of my own..
So my belief is somewhere else. One leg down still to go fill at least the biggest gap-up from 144. Closed my calls on a little profit. Only -P95 for 2025 left and some SPY -C for this week (394.... hope to lose them break even at 11 dollars on/after wednesday). Plus some MSFT -C320 june '16.
And all these stocks that need some watering....
Might I be right in a month (144 or lower in exactly five weeks) and @dl003 too (250 later this year): I will on betting on both deeply to get me a new model Y LR by end of the year, only costing me around the €28.000 that I hope to get for my MODEL 3 in june. Just have to deal a few months with no car of my own..
EVNow
Well-Known Member
Gary thinks SP will be between 150 and 200 for some time. That sounds likely ... barring major news (Tesla always has some major news, though).
SebastienBonny
Member
I think his major reasoning is 5 24 EPS @ 30-40 PE. Sounds reasonable to me now, but we all know stocks aren’t completely explainable and certainly not TSLA.
EVNow
Well-Known Member
To break out of this - we need some major development.
- All tech stocks suddenly getting higher i.e. major market movement. Say Nasdaq back above 14K-5k.
- ASP / GM trend reversal. We are now expecting ASP & GM to go down sequentially in Q2/Q3... if one of the quarters show them going up, that would be a catalyst.
- Major positive surprise in energy. Somewhat difficult because of the nature of business and finances.
I don't think Cybertruck or 3/Y Refresh will move the market much (except for brief FOMO runs). WS will want to see how they affect demand, GM & ASP before supporting higher price.
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