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Wiki Selling TSLA Options - Be the House
- Thread starter adiggs
- Start date
Darn. I hope not.
I closed out a bunch of profitable 220, 225, 230, 235 CCs exp this week that I'm trying to reopen for next week. Looking to open 245 or greater for next week.
I refuse to panic cover as my plan was always to let these go if it came to that. What I am going to do is let a few exercise at 190 today so I have some cash to sell CSP (this is in an IRA). New plan is to peel off ITM short calls little by little by flipping to multiple NTM puts. If we do reverse in the coming weeks, the remaining short calls will expire and hopefully I can still roll the puts back down to 190 to get the shares back.
myt-e-s-l-a
Member
TSLA has been up 11 days out of 13 days. Its at a 13 week high.
RSI hints that stock ma be overbought.
I am looking at the $250 level as an intermediate top.
STO 10x CC tsla 240119C230 @ 33.50
STC 1000 shr tsla @ $216.19
and
STO 10x CSP tsla 230619P200 @ 3.05
Ideal condition for "Sell in May and go away" (until Oct). Let's see how this works out.
RSI hints that stock ma be overbought.
I am looking at the $250 level as an intermediate top.
STO 10x CC tsla 240119C230 @ 33.50
STC 1000 shr tsla @ $216.19
and
STO 10x CSP tsla 230619P200 @ 3.05
Ideal condition for "Sell in May and go away" (until Oct). Let's see how this works out.
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EVNow
Well-Known Member
Seems to me we'll end up at 215. Max pain for my -205/+215 call spread
Rolled my 205 CC to 207.5 for next week. Yet to roll the -205/215.
not-adviceYeah that's what I would like to know
These contracts have been rolled so many times both up and down, I have no idea what I have earned on them. Though sitting on max time and with a strike too low they are not going to earn my much money right now.
This might have already been covered - short answer is that the likelihood of early assignment on 190 strike Dec '25 calls is close enough to zero to treat as 0.
With an option price of $87 and a share price of $215, those calls have $25 of intrinsic value and $62 worth of extrinsic / time value. On an early assignment, you sell the shares at $190 and have the $87 liability of the call option wiped out. The person doing the early assignment is giving you $62/share, or paying $277/share when shares can be purchased for $215.
Only in your wildest dreams will this happen
. Of course there are tax consequences to you that are highly non-desirable, but strictly as a trade, you want this to happen to as many shares / contracts as possible. This would be money for nothing, and its why it won't happen.We have seen early assignment on DITM and far DTE options. Think put options with a strike that is >2x the share price, or call options with a strike that is <1/2 the share price and >365 DTE. Out in those situations you've got such wide bid/ask spreads, the b/a spread is larger than the time value, and early assignment is a mechanism for controlling how much you lose to the spread. That's the one thing I would worry about. If the bid/ask spread were say $5 wide and time value was $3... But you've got $62 in time value against a b/a closer to (guessing) $5 or $10 -- again, nobody is going to take you up on that deal.
I get worried about early assignment when the time value falls below $0.50 (a little bit), and start biting my lip if time value is under $0.10. I also don't let options actually go to expiration, but instead use closing transactions to close before end of business. Even if I'm paying .05 or .10, I'd rather pay that than be exercised after close of business on options that I thought were worthless. This is another unlikely event, but if it happens can turn into multi-$$ loss; thus I pay the .10 or whatever so it never happens.
I needed to raise some cash anyway, and decided to close out some of the 195cc that were rolled from 190cc last week. For these that I'm closing out, the 1 week roll nets me about $6/share between the incremental credit and the $5 strike improvement.
The rest of the cc were rolled out to the end of the month (6/30) for an .80 credit and strike improvement ($200). Have some 195s remaining that expire next week.
I've been surprised at how boring the debt ceiling drama has been. I keep expecting somebody to push the brinksmanship even harder, and that hasn't come to pass. That also is telling to me that we can be less than a week from the US deciding to not pay its bills, and that qualifies as "boring". What was unthinkable within the last decade is now boring and pretty much expected.
With the other big tech names near ATH, that suggests to me the possibility of Tesla reacting to all this good news and moving in that direction itself.
The rest of the cc were rolled out to the end of the month (6/30) for an .80 credit and strike improvement ($200). Have some 195s remaining that expire next week.
I've been surprised at how boring the debt ceiling drama has been. I keep expecting somebody to push the brinksmanship even harder, and that hasn't come to pass. That also is telling to me that we can be less than a week from the US deciding to not pay its bills, and that qualifies as "boring". What was unthinkable within the last decade is now boring and pretty much expected.
With the other big tech names near ATH, that suggests to me the possibility of Tesla reacting to all this good news and moving in that direction itself.
No panic for me since I almost always trade in spreads. Just with this position too. If SP will plummet, I don't care. If SP will skyrocket, I also will not care. If SP will remain this week the premium will not be significantly higher or lower.
I’ve got a question:
I have 1,900 shares at $243 CB. Last week I sold -C240 and -C245 against them for 7/21 (49 days out) figuring they’ll for sure expire OTM (of course STO way too early…they’re trading now at $9.39 from $2.34
). I’m prepared for them to be called away as well and will just re-buy the shares with the proceeds.
I’m also holding -C245 for 9/15 (from a roll I’m stuck with) which will likely be ITM beforehand, but who knows?
My question is, if the shares are called away on 7/21 is the strategy to buy the 1,900 shares again in the 240’s (if it’s trading there) to hold to cover the -C245 9/15, or is there something else that can be done to salvage the 9/15 -C240 contracts in case TSLA is trading at say $260 by then?
(And any suggestions for the -C360 @ 1/19? My plan with that one was to BTC on a dip in the 180’s but it got away from me. I have enough shares at $360 to cover it, though I doubt TSLA will be close to that in 6 months. The only downside is I could’ve gotten a lot more premium had I waited for TSLA to be in the 240’s to STO instead of 184.)
TIA
I have 1,900 shares at $243 CB. Last week I sold -C240 and -C245 against them for 7/21 (49 days out) figuring they’ll for sure expire OTM (of course STO way too early…they’re trading now at $9.39 from $2.34
). I’m prepared for them to be called away as well and will just re-buy the shares with the proceeds.I’m also holding -C245 for 9/15 (from a roll I’m stuck with) which will likely be ITM beforehand, but who knows?
My question is, if the shares are called away on 7/21 is the strategy to buy the 1,900 shares again in the 240’s (if it’s trading there) to hold to cover the -C245 9/15, or is there something else that can be done to salvage the 9/15 -C240 contracts in case TSLA is trading at say $260 by then?
(And any suggestions for the -C360 @ 1/19? My plan with that one was to BTC on a dip in the 180’s but it got away from me. I have enough shares at $360 to cover it, though I doubt TSLA will be close to that in 6 months. The only downside is I could’ve gotten a lot more premium had I waited for TSLA to be in the 240’s to STO instead of 184.)
TIA
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EVNow
Well-Known Member
Don't want to get too OT - but I think threat of using amendment 14 had something to do with it - and unfortunately appeasing big oil by approving a pipeline.
I rolled my $215 to $217.5 for next week at $4.30
Can you help me understand your position better?
Back in May 19th, you had spent $126 to have this position:
1 Call June 170
-2 Call June 185
1 Call June 2 210
And today, you had this position (plus a realized profit of $444):
-2 Call June 185
+3 Call June 205
I assumed the "June" meant June 16, since it's a monthly? Assuming stock price was $215 at the time of the trade (for easy math), didn't you just trade $45 of intrinsic value in the Jun 170 for $30 of intrinsic in the 3x Jun 205? And you have a $6000 liability in the Jun 185 short calls to boot?
Granted, if the price keeps rising, you'll have a leveraged gain. But what if the stock price ends between 187.25-241 in 2 weeks? Wouldn't that be a net loss result?
Also, I get that below $187.25 or above 242, you'll gain additional profit, and that's pretty much gravy for an initial $126 investment! But right at a stock price of $205, wouldn't you be at max loss of $3566?!?!
I waited until the end of the day to deal with my 212.5CC. I ended up rolling them to Jan 2024 350 strike for $6.2 credit. So I make my 0.2 weekly goal for the rest of the year. The only thing I don't like about it is the strike. I wanted to eventually get $6 for Jan 2024 and stop doing weeklies, but I wanted the 400 strike. I could have rolled the 212.5 to 225 next week, but if the SP keeps climbing like it did this week, it could quickly get $10 ITM and then the roll to Jan 2024 doesn't work as well, so I went with it today. If we do get back to ATH in the next 6 months, I can hopefully roll the 350 up to something like 450 Jan 2025. 
I wouldn't be surprised if we trade below 210 a day or two next week. The OI for 6/9 leaves a hole somewhere in the middle of the highest and lowest call and put strikes, I am seeing it near 202.5 and 207.5. Moves yesterday to today suggested that we'd.land between 210 and 212, not bad being off by a couple bucks. Can't wait to see Monday's pricing update of the shift from today's trades. While not a reliable read, still fun to explore.
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So how are you planning to manage that position if the SP stays within the 190-240 range these next two weeks? I don't see any rolling options that would free up your position (since it's a spread).
Edit: If you close out your position today, wouldn't you have a realized net loss of almost ~$2000!?!? I'm not understanding the upside of your trades and spread?
As I mentioned earlier on this thread, it may sound cryptic, but I trade options, not strikes. I usually also do not wait for the expiry date. Besides that, big chance that I will change my position next week, depending on the move of the SP.
Please understand me correct, I am not pretending that all my trades are with a profit. Sometimes I have to take a loss, that's all part of the game. Perhaps this trade will also not be as I calculated. But I know what I am doing.
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