Wiki Selling TSLA Options - Be the House

[MikeC]

Did someone switch the TSLA ticker with NVDA?
That rocket should have been ours!

Is it crazy to think that some of TSLA’s weakness is a result of NVDA’s strength? From Oct 10 til now it’s been steadily up, while TSLA went from 265 -> 185.

Similar growth stories and investor base - that money would have gone somewhere else if not NVDA.

I compared the option premiums and NVDA’s are understandably way better. Maybe some option action will shifting there, too?

I have no position but I’m almost tempted to sell a put and wheel it if it gets assigned. Maybe wouldn’t hurt to diversify my options selling.

 

[Right_Said_Fred]

I compared the option premiums and NVDA’s are understandably way better. Maybe some option action will shifting there, too?

Are NVDA’s option premiums really that much better? The stock is higher ($307 at close versus $184), which already explains part of it. But NVDA’s current premiums are also not representative: IV is very high because of today’s earnings. That will soon come down, just like it did with TSLA in the weeks since earnings.

 

[MikeC]

Are NVDA’s option premiums really that much better? The stock is higher ($307 at close versus $184), which already explains part of it. But NVDA’s current premiums are also not representative: IV is very high because of today’s earnings. That will soon come down, just like it did with TSLA in the weeks since earnings.

That’s very true, forgot about that!

 

[EVNow]

If volatility is high, I think it is even more profitable to sell long term options instead of short term (Vega).

Prove it.

 

[SebastienBonny]

That’s very true, forgot about that!

Selling puts after a 25% rise (we'll see what happens today, but could be something like that in regular trading as well) isn't a good idea as well

 

[Max Plaid]

Is it crazy to think that some of TSLA’s weakness is a result of NVDA’s strength? From Oct 10 til now it’s been steadily up, while TSLA went from 265 -> 185.

Similar growth stories and investor base - that money would have gone somewhere else if not NVDA.

I compared the option premiums and NVDA’s are understandably way better. Maybe some option action will shifting there, too?

I have no position but I’m almost tempted to sell a put and wheel it if it gets assigned. Maybe wouldn’t hurt to diversify my options selling.

I believe that NVDA was heavily shorted and like they did with TSLA in the past, rather than conceding defeat and closing, the shorts kept piling-in

No doubt there are investors adding to that, but I think the current share-price is artificially way too high, same as TSLA >400 in October 2021, even >300 was too much in hindsight

Not saying the Nvidia's outlook isn't good, they're shifting a lot of GPU for AI, which isn't going to go away anytime soon, but they have a very high P/E, which isn't sustainable

I'm going to look at the NVDA options-chain, might be fun to buy some beer-money shitputs for entertainment value. Not advice.

 

[SebastienBonny]

I believe that NVDA was heavily shorted and like they did with TSLA in the past, rather than conceding defeat and closing, the shorts kept piling-in

No doubt there are investors adding to that, but I think the current share-price is artificially way too high, same as TSLA >400 in October 2021, even >300 was too much in hindsight

Not saying the Nvidia's outlook isn't good, they're shifting a lot of GPU for AI, which isn't going to go away anytime soon, but they have a very high P/E, which isn't sustainable

I'm going to look at the NVDA options-chain, might be fun to buy some beer-money shitputs for entertainment value. Not advice.

Discussed this with a colleague this morning and a +- 200 P/E for NVIDIA isn't sustainable in my view.
So buying shitputs to anticipate a pullback might be golden.

But very short term this may be moving the market a bit. TSLA was at 185 after market so hoping to get a bit higher today.
Closing CC at 178 yesterday turns out to be a good exit point to get back in today.

 

[intelligator]

Horse trading from c205 to c190 , slight pull back at p185, highest call OI is 200, highest put OI is 120 ? Near the money, high OI are p170 and c190. Hard to gauge pre-market whether there'll be an opportunity to snag a 1.3 DTE +p170/-p175 for .35 , TSLA would need to touch 182.xx

 

[Max Plaid]

Manipulators would love to keep TSLA just below 185 this week, but with the huge upward pressure from the NVDA beat it might be a challenge as the QQQ is likely to pop hard

The Joker in all of this will be the debt talks, if we get negative news from those then could halt the green wave, if we get positive signals, or even a deal...

Not going to be boring, that's for sure!!!

Still holding 90x -c185 & 45x -p185 for this week. Would be nice to close these out and be ready to react to a breakout in either direction, plenty of dry powder in any case...

 

[Jim Holder]

So I'm wondering how you guys handle a situation where you have some shares you are looking to liquidate at around cost basis/break-even to raise some capital—for example TSLA at $200—and you've sold CCs against them for say 2-weeks from now, and in the meantime the SP touches $200 before then and you can escape the shares before the SP retraces back down (if it does) and you miss your chance, but then you are stuck with the sold CC that's now red. Is that one of the downsides selling CC's and are there cure mechanisms for when such a scenario occurs?

 

[MrMoo]

Manipulators would love to keep TSLA just below 185 this week, but with the huge upward pressure from the NVDA beat it might be a challenge as the QQQ is likely to pop hard

The Joker in all of this will be the debt talks, if we get negative news from those then could halt the green wave, if we get positive signals, or even a deal...

Not going to be boring, that's for sure!!!

Still holding 90x -c185 & 45x -p185 for this week. Would be nice to close these out and be ready to react to a breakout in either direction, plenty of dry powder in any case...

I've seen QQQ up 2% and TSLA end flat or red.

 

[Max Plaid]

Of course with NVDA, all the call holders will be cashing-in this morning and likely a lot of folks buying puts, so one would expect a lot of offloading of shares by the MM's pushing the price down quite quickly

 

[dl003]

This reminds me of 1/4/2022 when TSLA spiked to 1200 following a Q4 delivery number of 308k. On that day, TSLA single handedly pulled the SP 500 into the green, only to make it the major market top as we know it. This time it's NVDA. Worse, while TSLA was making a record number of delivery, NVDA earnings went down YOY. Urging caution. I don't see why this should have a long lasting positive effect on the market as a whole.

 

[juanmedina]

So I'm wondering how you guys handle a situation where you have some shares you are looking to liquidate at around cost basis/break-even to raise some capital—for example TSLA at $200—and you've sold CCs against them for say 2-weeks from now, and in the meantime the SP touches $200 before then and you can escape the shares before the SP retraces back down (if it does) and you miss your chance, but then you are stuck with the sold CC that's now red. Is that one of the downsides selling CC's and are there cure mechanisms for when such a scenario occurs?

Take the lost on the CC's if you really want out .

I am so jealous of NVDA right now lol.

 

[EnzoXYZ]

Is it crazy to think that some of TSLA’s weakness is a result of NVDA’s strength? From Oct 10 til now it’s been steadily up, while TSLA went from 265 -> 185.

Similar growth stories and investor base - that money would have gone somewhere else if not NVDA.

I compared the option premiums and NVDA’s are understandably way better. Maybe some option action will shifting there, too?

I have no position but I’m almost tempted to sell a put and wheel it if it gets assigned. Maybe wouldn’t hurt to diversify my options selling.

My friend that got into TSLA options from my recommendation has been doing exactly this recently. He sells puts and doesn't mind owning some NVDA stocks. The last two weeks he kept suggesting I should give NVDA option a try to be more "diversify" as he knows I'm nearly 100% in TSLA only. Let us know if you start trading NVDA options (Or anyone else for that matter).

 

[Jim Holder]

Take the lost on the CC's if you really want out .

I am so jealous of NVDA right now lol.

Yes, I can close them today (now) for some profit and no loss thankfully. My question is about the dynamic of “locking” up the shares for a price point in the future that may or may not hit, meantime missing an exit ramp when share price might pop and appear in between but retrace some (but not enough to escape the contract at b/e or little loss).

Curious what rules and strategies are used around this situation other than selling CCs on shares you want to liquidate but go no more than 5-7 DTE and stay nearer to the money.

 

[MikeC]

My friend that got into TSLA options from my recommendation has been doing exactly this recently. He sells puts and doesn't mind owning some NVDA stocks. The last two weeks he kept suggesting I should give NVDA option a try to be more "diversify" as he knows I'm nearly 100% in TSLA only. Let us know if you start trading NVDA options (Or anyone else for that matter).

Just flipped an ITM TSLA -p185 to an OTM NVDA -p380, both for Friday, for a $2.50 credit.

 

[UltradoomY]

Just flipped an ITM TSLA -p185 to an OTM NVDA -p380, both for Friday, for a $2.50 credit.

Just as an experiment?

That $380 is wild to me... IV is really high still even after earnings.

Good luck - will follow along on that one (just watching)

 

[bingoz]

Take the lost on the CC's if you really want out .

I am so jealous of NVDA right now lol.

Only if you have only shares or LEAPs. You might cry if you have any CC

Yes, I can close them today (now) for some profit and no loss thankfully. My question is about the dynamic of “locking” up the shares for a price point in the future that may or may not hit, meantime missing an exit ramp when share price might pop and appear in between but retrace some (but not enough to escape the contract at b/e or little loss).

Curious what rules and strategies are used around this situation other than selling CCs on shares you want to liquidate but go no more than 5-7 DTE and stay nearer to the money.

IMO, CC is for additional income, not an exit strategy. Me personally if I want to liquidate my shares, I just stay away from CC, keep things simple.

 

[MikeC]

Just as an experiment?

That $380 is wild to me... IV is really high still even after earnings.

Good luck - will follow along on that one (just watching)

Yeah, just an experiment. Trying to see if diversifying opens up more trading strategies or if it’s just double the stress watching the two tickers.