Wiki Selling TSLA Options - Be the House

[SebastienBonny]

Something to consider, there are a lot of people under water trapped from the $250 area from months ago and we’ll likely see heavy selling as TSLA gets close to that. I don’t know if/how it will affect momentum, would be interesting to see.

Some may also hold over $250 until reversal seems to start, wherever it will be.

Certainly possible!
Another important thing when events like this happen: the importance of selling calls near/at/above cost base (or price you're willing to sell for).
You can get under water very fast, but that's no problem if you're happy to let a contract expire.
Of course you could be disappointed because you missed an upside opportunity, but if you never want to miss upside opportunities, you should leave the options game and only buy & hold. Of course you can combine both .

So right now I will keep rolling my 225CC week by week as long as it's worth it (which is 1 to 1.5 per share). Will have to keep a close look at extrinsic value of course.
Maybe we will get a pullback because of sellers coming in and it wouldn't be the first time Tesla retraces after a quick rise. Lots of traders/MM's won't like this price action.
When it's not worth it anymore, I'll let it expire and sell puts instead.

 

[SebastienBonny]

Interesting analysis:

Well interesting indeed.
If I understand correctly 193 is a major level.
Breaking under could see 150s again.
That's the downside. Upsides are 250s and if it blasts further 270s.
Interesting to see what happens today, because we actually went to one of the levels (246).

RSI is also important because we are overbought at this time.
Last time RSI was oversold, we were at 100s and we all know what happened there.
Last time RSI was overbought, we were at the previous highs (217ish?) and went down from there.
Will keep these numbers in mind next weeks to see how this plays out, but again, I don't think we should take quick conclusions here about under water CCs.

Edit: don't forget next week there is a very large range of open interest.

 

[InTheShadows]

Longtime lurker, first time poster - in this thread. I have been having some moderate success in selling CC's over the years, but have gotten a bit more aggressive lately. Not the best time to get more aggressive given the recent price action, but I believe I have saved myself some grief by buying offsetting Calls over the past few days. Here are my positions:

4x TSLA 230616C213.33 @ 7.51 (Bought) / 22.75 current
3x TSLA 230616C222.50 @ 4.46 (Sold) / 15.25 current

and

5x TSLA 230616C225.00 @ 9.80 (Bought) / 13.43 current
5x TSLA 230616C235.00 @ 3.00 (Sold) / 7.60 current

In both cases, I had sold some Calls, watch the underlying continue to run and rather than roll or sell at loss, bought Calls to cap the potential loss, and ideally, eek out a gain given the difference in strikes. The first set is in a taxable account, the second is not. I'm slightly upside down on the second set of positions, but the gap is narrowing as SP rises.

The way I see it, I may let the second set exercise if we do hold over 235 next week, assuming I hold until expiration. I think I should close the first set sooner or later as I do not want to have these exercise and they are decently ITM as of today. I still don't have a terribly strong stomach for these, and may just close both sets and sell some longer dated higher strikes to take advantage of the hot streak.

Still learning, appreciate the existence of this thread.

edit - I see we are over $240 AH now, so these positions should just max out at the strike differential, capping my gains.

Wow! This is brilliant. Wish I had known about this last January before the market went to and all my put spreads went belly up. Thanks for sharing.

 

[Jim Holder]

I don't think we should take quick conclusions here about under water CCs.

Very true and is something that requires emotional discipline, which I'm still learning to gain.

Broadly speaking I wonder if "this time it's different" since the positive buzz re Telsa is quite loud and can keep the pedal to the floor for some time, vs. other sell the news events/people lose interest. So much buying took place the past week it's hard to contemplate a reversal, which is where the discipline comes in.

I guess this means we watch how it reacts around $250's if it gets there before a retest and that can tell us if to start worrying about NTM or ITM short calls.

Hopefully the next few trading days give us all more clarity.

 

[rikkert]

Where is your god now, technical analysts?

Glad I closed my -230Cs yesterday on a hunch, for a small loss.
Have a bunch of -255Cs open for next week. Not sure how I feel about those.

As we say in Dutch: Luxury problems!

 

[Jim Holder]

As we say in Dutch: Luxury problems!

I agree with this 100%. I much prefer dealing with issues caused by the share price zooming up than plunging down.

 

[MikeC]

Very true and is something that requires emotional discipline, which I'm still learning to gain.

Broadly speaking I wonder if "this time it's different" since the positive buzz re Telsa is quite loud and can keep the pedal to the floor for some time, vs. other sell the news events/people lose interest. So much buying took place the past week it's hard to contemplate a reversal, which is where the discipline comes in.

I guess this means we watch how it reacts around $250's if it gets there before a retest and that can tell us if to start worrying about NTM or ITM short calls.

Hopefully the next few trading days give us all more clarity.

The upside concern is that at a certain point, the system becomes a positive feedback cycle.

Instead of higher prices being a check on demand like a normal market, when TSLA gets more expensive it becomes more desirable to buy. FOMO, algos, short covering, gamma squeeze, etc. all conspire to keep rallies going farther and longer than anyone expects.

I should have been smart and taken the loss on my short calls once sentiment started changing after the shareholder meeting. But I don’t mind too much having cash to sell more NTM puts.

 

[Jim Holder]

Echos of NVDA run up maybe? Each $10 up it was like “no way it can go higher, this is the top, it’s stupid to get in now,” and yet $100 dollars later the whole run was missed with that kind of thinking. I’m not suggesting to go long TSLA now (or not), I just found it interesting about the difficulty of keeping an open mind when it defies TA and logic.

 

[JustMe]

Could someone please let me know what the closing price will be for TSLA today?
TIA

 

[juanmedina]

News >>>> TA.

Hertz redux.

I’ve never got caught in CCs till now. Let’s see what happens I’ll try to keep rolling 205 Calls.

How are you rolling those? Are you rolling for strike improvement? I assume you have to roll by over a week.

Any advise for people with experience with underwater cover calls?

 

[UltradoomY]

How are you rolling those? Are you rolling for strike improvement? I assume you have to roll by over a week.

Any advise for people with experience with underwater cover calls?

the only non advice is - figure out if you want strike improvement or credit.
If strike, roll out to stay in contact (meaning close) to the underlying without adding too much time value.
If credit, figure out what strike you are ok with letting them exercise and go for that with credit.

For me - I was planning on $250 in July - I will take $250 this week or next though....

I have a bunch of $230's for next week and even more July $250's - I will wait for next week on the $230's and the July $250's -
If next week we are above $230 - I will roll out to whatever date get's me to $250 strike for the calls and let them exercise there.

Still heavy with December $200's and shares to ride up and take some cash off the table.

Pretty happy with the July $250P's I sold earlier this week for $30 each - creating a straddle with the calls - so those are well ahead but have a bunch of time to bleed.

 

[BornToFly]

NVDA went from 300 to almost 400 and new ATH in one day. TSLA has been steadily climbing every week, and is still WAY below the ATH. We are still below 300, a price I didn't think we should have ever dropped below last fall. So I don't know how much of a pull back TSLA is going to have, and at what point. There will be a pullback, but will it be from 300 to 275 before going to 400? Not closing todays 252.5CC yesterday morning for just .09 is going to cost me dearly today. I'm probably also going to close for a loss the naked 300calls I opened yesterday for an "easy" 0.1 as well.

Complicating things is CPI and FOMC next week, which could let the market rip higher still.

 

[GrmMastrDoobie]

Oops sold a call yesterday for $250 strike. Ugh what a dumb ass. Now what?

 

[SebastienBonny]

Oops sold a call yesterday for $250 strike. Ugh what a dumb ass. Now what?

Let the shares go and sell put, roll this to next week (higher strike or premium or both), or close for a loss.
Plenty of options

Know we could stay under 250 by end of the day and that contract would expire worthless...

 

[GrmMastrDoobie]

Let the shares go and sell put, roll this to next week (higher strike or premium or both), or close for a loss.
Plenty of options

Know we could stay under 250 by end of the day and that contract would expire worthless...

According to this, the odds are it's safe. At least in recent history. Good luck today everyone.

 

[Hiline]

NVDA went from 300 to almost 400 and new ATH in one day. TSLA has been steadily climbing every week, and is still WAY below the ATH. We are still below 300, a price I didn't think we should have ever dropped below last fall. So I don't know how much of a pull back TSLA is going to have, and at what point. There will be a pullback, but will it be from 300 to 275 before going to 400? Not closing todays 252.5CC yesterday morning for just .09 is going to cost me dearly today. I'm probably also going to close for a loss the naked 300calls I opened yesterday for an "easy" 0.1 as well.

Complicating things is CPI and FOMC next week, which could let the market rip higher still.

I am still very skeptical of this run-up. I did expect TSLA to touch $250 by EOY but end the year below that mark, because the fundamentals don’t support that price level. P/E of 69 is going to be close to 100 following Q2 earnings. This run-up is fueled by the news and the hype, but the financials will bring everyone back to earth. I am not saying TSLA can’t reach $300 in the next month, because human emotions are unpredictable, but I think a strong pullback in July is imminent. Worst case, the stock goes back down to $150. Best case, $200 is the landing point.

 

[phantasms]

100% with you. I’m more than happy to get some called away here and play the wheel game.

 

[myt-e-s-l-a]

Rolling expiring put. TSLA @ 232.50

BTC +10x CSP tsla 230609P215 @ 0.05
STO -10x CSP tsla 230616P215 @ 1.55

for credit 1.50

Rolling depreciating Put. TSLA @ 247.50

BTC +10x CSP tsla 230616P215 @ 0.50
STO -10x CSP tsla 230623P220 @ 1.73

for credit 1.23

 

[BornToFly]

I got the iPad out to type that it looks like 250 could get defended, or the shorts are using all their ammo and it will blow up once they are out. Appears to be the latter as I type this….

 

[BornToFly]

300 strike calls for next week are almost $1 now. Insane!