Wiki Selling TSLA Options - Be the House

[Max Plaid]

TSLA in beast-mode! Fortunately I bailed-put of my -c170's earlier, also the -p172.50's I opened late last week, slightly too early on those, but had a new plan...

Decided I wanted to take some profits on the Dec 25 c140 LEAPS and roll them up to a higher strike with 50% more contacts (i.e. some leverage), had the bright idea to facilitate this with a -185 straddle this week, figuring we'd probably stay flat, managed to sell the call side, but misses the puts by a few cents, meh! Will see how things pan-out in the coming days, the weekly calls will lose extrinsic, the LEAPS not, but would have liked the extra income from the puts

So for the LEAPS, I was thinking to go with Dec 2025 c200's, then write Dec 2023 -c200's against them, at the time I was looking was $60 for the LEAP and $25 for the short call, given the economic uncertainty, seemed like a good risk/reward, I don't know, will see...

 

[Jim Holder]

If TSLA rallies to the top all by itself then pls, for the love of God, don't stand in front of it.

I wonder if that’s what’s happening here.

 

[Cherry Wine]

Kinda wonder if some institutions are getting in.

 

[Right_Said_Fred]

I doubt this is institutions getting in, with no substantial news expected for the next few months, plus the macro uncertainties (even expressed by Elon). It feels more like massive call buying and the hedging as a result of that. Remember, TSLA is by far the #1 place for option trading and the huge volumes can exaggerate the SP movement, both up and down.

So I will be careful moving my put strikes up too much. I don’t want to get caught by a sudden correction.

 

[MikeC]

I doubt this is institutions getting in, with no substantial news expected for the next few months, plus the macro uncertainties (even expressed by Elon). It feels more like massive call buying and the hedging as a result of that. Remember, TSLA is by far the #1 place for option trading and the huge volumes can exaggerate the SP movement, both up and down.

But who’s doing the massive call buying if not institutions? I’m not seeing enough retail hype right now - not saying bulls aren’t bullish, but we’re a far way from the days when people were falling over themselves to buy calls out of FOMO.

Not seeing any catalysts until P&D report in 5 weeks, either. If anything, the debt ceiling drama is a near-term negative catalyst.

Maybe just people realizing TSLA is ridiculously undervalued after the upbeat shareholder meeting? Or maybe this really is the Twitter overhang lifting?

 

[SebastienBonny]

Guys, always look into other stocks as well. Polestar, Lucid, Rivian are up like Tesla today. Don’t think today is really Tesla-related.

 

[vikings123]

But who’s doing the massive call buying if not institutions? I’m not seeing enough retail hype right now - not saying bulls aren’t bullish, but we’re a far way from the days when people were falling over themselves to buy calls out of FOMO.

Not seeing any catalysts until P&D report in 5 weeks, either. If anything, the debt ceiling drama is a near-term negative catalyst.

Maybe just people realizing TSLA is ridiculously undervalued after the upbeat shareholder meeting? Or maybe this really is the Twitter overhang lifting?

Agreed. Retail call buying usually does little to move the stock. Yes there is a lot of bullish options bets AND this mostly coming from institutional “investors”.

One day does not make a trend but IMO everytime starts trading above 50 SMA it runs.

I closed all my covered calls for a loss and will re assess based on what happens tomorrow. Closing at the highs for the day is also very bullish.

 

[BornToFly]

Nio up almost 9% today. RIVN up more than TSLA as well. This run-up appears EV related and TSLA is still being held down relative to others. I have 200, 202.5 and 205CC for Friday. I would like to roll as late in the week as possible, but might be forced to roll tomorrow if we get much over 190. I would like to roll early enough to roll to 210 or higher for a small credit.

 

[BornToFly]

I've also been selling Puts trying to get my shares back that I had sold at 160. We have now climbed steadily for almost $30 without a pullback. I'm having trouble not losing contact now, and I'm now short $3/share after all the premiums. Current Puts are for 185 this Friday.

 

[bingoz]

I doubt this is institutions getting in, with no substantial news expected for the next few months, plus the macro uncertainties (even expressed by Elon). It feels more like massive call buying and the hedging as a result of that. Remember, TSLA is by far the #1 place for option trading and the huge volumes can exaggerate the SP movement, both up and down.

So I will be careful moving my put strikes up too much. I don’t want to get caught by a sudden correction.

I rolled my -c172.5 to -c182.5 this week last Thursday for a small debit, and I likely have to do the same for this week too, but I just didn't want to do it right on the first day of the week. Same to you, I expect a small correction, but not too wild. The reason is, when looking at the mega cap companies, TSLA probably is the only one that is still >50% down from ATH or ~40% from 52k high. It's suck but on the bright side, I think the R:R of TSLA is more attractive to people, there is still a lot of room to ride, at least until 250-300 the breakeven points for a lot of people.

Nio up almost 9% today. RIVN up more than TSLA as well. This run-up appears EV related and TSLA is still being held down relative to others. I have 200, 202.5 and 205CC for Friday. I would like to roll as late in the week as possible, but might be forced to roll tomorrow if we get much over 190. I would like to roll early enough to roll to 210 or higher for a small credit.

Market cap of RIVN or NIO is much smaller than TSLA, so it's easier to manipulate IMO.

 

[Max Plaid]

Nio up almost 9% today. RIVN up more than TSLA as well. This run-up appears EV related and TSLA is still being held down relative to others. I have 200, 202.5 and 205CC for Friday. I would like to roll as late in the week as possible, but might be forced to roll tomorrow if we get much over 190. I would like to roll early enough to roll to 210 or higher for a small credit.

Yeah, I see a lot of garbage stocks went up way more than TSLA today. Have to admit that I was a bit wrong-footed with AAPL dropping, but now I see it received a downgrade, that was not reported on my newsfeed al the time...

I too sold out of all my shares at a net $164 price, but I'm not beating myself up over it. Just going to keep buying LEAP and sell them on decent profits as they come. As mentioned above, strongly thinking of Dec 25 c150's - can get 40% more of those than the c140's currently holding. Rather than selling Dec -c200's against them, I'm thinking $1 strikes weekly, most of the time they'd expire ITM, and if they didn't, so what, the underlying calls will go up in value too and have more extrinsic than ODTE's

Of course then we have the risk of the SP dumping way below $200, and it is a risk, hence my idea to sell December -c200's. Meh, too many possibilities!

 

[intelligator]

Posted to wrong thread a few minutes ago, yikes.


Oh oh, I'm in deep _____ ! I had to leave for work today, couldn't trade, placed order at 330, it didn't fill. I'm stuck with -c180/+c190 spread for Friday. I have plenty of margin to widen to $30. The order was for 6/2 -c185/+c215 @ 1.10 credit. Worst case is what I explained a few weeks ago to @Jim Holder , but instead with calls. While I have a spread, Fidelity set aside a portion of contracts backed by shares (cc). If the short side executes, what's my next move? I clearly don't have the funds.to back. The long side can execute to buy shares at 190. If I don't have enough cash (would be 20% short change) i immediately sell the shares and take the $10 loss. Correct ?

I am glad to not have had that roll order fill... it worsens the situation if we continue to climb.

 

[Right_Said_Fred]

Agreed. Retail call buying usually does little to move the stock. Yes there is a lot of bullish options bets AND this mostly coming from institutional “investors”.

One day does not make a trend but IMO everytime starts trading above 50 SMA it runs.

I closed all my covered calls for a loss and will re assess based on what happens tomorrow. Closing at the highs for the day is also very bullish.

It’s not just retail buying calls, big players are also involved. Today’s option volume was over 2 million calls and puts. Retail does not have the means for such volume.

Those options represents 200 million shares. Not all of those have to be immediately hedged by market makers, but a substantial part do, especially during a big move when more strikes get ITM. It then becomes a self-reinforcing process. One indication is that there was no stock moving news. Another one was the decoupling from the major indices, TSLA clearly started to lead a life of its own.

 

[Jim Holder]

It’s not just retail buying calls, big players are also involved. Today’s option volume was over 2 million calls and puts. That represents 200 million shares. Not all of those have to be immediately hedged by market makers, but a substantial part do, especially during a big move when more strikes get ITM. It then becomes a self-reinforcing process. Also, there was no stock moving news. Another indication was the decoupling from the major indices, TSLA started to lead a life of its own.

Are you saying in between the lines that this run has teeth and watch out above or it might be short-lived, and for those of us who’ve been waiting to liquidate shares in the $200 area to raise capital should start doing that slowly over the next few days since we may not see $200 or much over it at least till after Q2-23 P&D in early July (NFA of course)?

 

[EVNow]

I doubt this is institutions getting in, with no substantial news expected for the next few months, plus the macro uncertainties (even expressed by Elon). It feels more like massive call buying and the hedging as a result of that. Remember, TSLA is by far the #1 place for option trading and the huge volumes can exaggerate the SP movement, both up and down.

So I will be careful moving my put strikes up too much. I don’t want to get caught by a sudden correction.

I’m not so sure.

The biggest change was Elon agreeing to do ads. That means - at least that’s the theory - potentially Tesla doesn’t need to cut prices to increase demand and might even be able to increase prices to gain back some lost margin.

Some institutional buyers might be back because of that.

Ofcourse a sudden correction is always possible with Tesla. Worst thing to do is to move up any sold puts by taking some profit.

 

[Oil4AsphaultOnly]

I’m not so sure.

The biggest change was Elon agreeing to do ads. That means - at least that’s the theory - potentially Tesla doesn’t need to cut prices to increase demand and might even be able to increase prices to gain back some lost margin.

Some institutional buyers might be back because of that.

Ofcourse a sudden correction is always possible with Tesla. Worst thing to do is to move up any sold puts by taking some profit.

It's all relative isn't it? Since I did exactly this!

I had split some -175c (part of a -175p/175c short-straddle) to -185c earlier today, so rolling up the puts to realize some of the short-put profits is just legging into a new short-strangle (-180p/-185c). I had kept some margin available, so if it corrects, I would just split the -180p down to 2x -175p. and can roll the whole thing into the following week's -170p if needed.

 

[BornToFly]

One indication is that there was no stock moving news. Another one was the decoupling from the major indices, TSLA clearly started to lead a life of its own.

The "decoupling" is involving multiple EV companies, of which TSLA is actually underperforming.

 

[BornToFly]

Dan Shapiro talking about where TSLA could go -

 

[juanmedina]

Dan Shapiro talking about where TSLA could go -

what is the SP of the line that he thinks we need to clear for the stock to really go up? I can't see the numbers with those crazy neon colors.

If I get a chance tomorrow I am going to close my 187.5cc. We are up already 14% in the last 5 days.

 

[Jim Holder]

We are up already 14% in the last 5 days.

Reminds me of two traders discussing TSLA:

“The stock is up already 15% in the last 5 days, the bear is over, here comes the next 15%!”

“The stock is up already 15% in the last 5 days, it can’t possibly go any higher. It’s a bull trap!”

We often find ourselves bouncing between those two quite often.