Wiki Selling TSLA Options - Be the House

[Max Plaid]

Looking for non-advice on some of my biggest headaches currently:

I have 19x -C240 9/15, got $5.62 for it back when I needed to roll it last month, and it’s now red -$46k. It was suggested earlier to maybe flip them to put.

I checked this in TOS and can roll
19x -C240 9/15 to 19x -P250 11/17 for $8k credit, turning the loss to close it into to a potential gain.

My thinking is that, while we can never say with certainty, by November 2023 TSLA should have completed any retests and likely () be well above $240-$250 by then or at least near it so it’ll likely expire worthless.

Am I thinking about this properly? Is there something else I should know about or could do, perhaps another date/strike (like -P240 12/15 @$1.2 credit, closer to end of year hype/rally), or better wait some more for the retest before playing with this contract?

Would this also work to convert deep red 30x -C360 1/29/24 to -P180 12/15/23 (for credit) or is that taking on too much risk?

(Meantime on Friday at open I bought 35x +C360 9/15 @ $4.70 to stick on at least some Delta hedge on while I figure out the best move.)

Thanks in advance.

Be very careful flipping an ITM call to a put and vice-versa. TSLA has risen massively in the last couple of weeks with zero change in fundamentals, but just a shift in sentiment. It might keep going up to ATH or it could drop back below $200, we don't know...

An idea, although not advice, if you have the cash to cover them, sell some weekly -pATM's, for every 6x of those you can buy back one of the calls...

 

[MikeC]

Lots available:
700 @$215.11 CB
1,900 @$243.02 CB
400 @$269.97 CB
500 @$294.25 CB
3,000 @$358.79 CB

6/9
-C230 (x7) + $4.24 premium ($234.24) are against 215CB
-C245 (x18) + $0.49 premium () are against 243CB

6/16 - CPI/FOMOC week
-C225 (x6) + $3.80 premium (=$228.30), were to be against the same $215 because I didn’t expect $230 to hit 6/9. So I’ll have to rebuy or roll or do something else.
-C230 (x2) + $2.35 premium (=$232.25), same
-C243.33 (x19) + $1.45 premium (=$244.78), same

6/23
-C220 (x7) + $15.69 premium (=$235.69), against the shares I’d buy back if 6/16 got called away.

6/30 - Week before P&D
-C215 (x6) + $4.59 premium (=$219.59), same
-C220 (x15) + $4.93 premium (=$224.93), expected not to be ITM but now it likely will.
-C300 (x25) +$0.41 premium. Not worried (yet)

7/21
-C240 (x15) + $2.34 premium (=$242.34), using the shares I’ll buy back with proceeds from called away shares (plus any extra, or roll up and out, whichever is less cost)
-C245 (x4) + $2.04 premium (=$247.04), same

9/15
-C240 (x19) +$5.62 premium (=$245.62), same. This one is likely most dangerous. Will likely roll or BTC with -P money or delta hedge with calls.

I would worry about the 9/15 later. A lot of time value and anything can happen between now and then. I would mentally assign the 1900 shares at 245 to that position and work on getting rid of the nearer term ones.

6/16: I would close the 19x -c243.33 for this week and take the loss. They could expire worthless but you don't have the luxury of finding out because they could also be DITM by the end of the week and you'll be really screwed. Then I would maybe flip the 2x -c230 into something like 4x -p245. Let the week play out and if your -p245 go ITM then your -c225 can probably be rolled up or maybe even expire. If we do keep going up, you're stuck with those 6x -c225 but your puts expire and at least you got rid of 21 short calls for minimal loss this week.

6/23: If you are stuck dealing with the puts you sold from 6/16, at least your calls will be in better shape to roll up or close. If the puts expired, then your calls are in worse shape but now you can resell the puts and use the premium to close out some more calls.

6/30: I would close the -c300 ASAP with the same logic as the 6/16 -c243.33. Yes, will probably expire but with the leverage you have you're just not in a position to find out without risking your whole account. $4500 to close 25 contracts of exposure seems worth it to me. The -c215 and -c220 don't look great right now and you might have to let them go but it will be more clear in a couple weeks.

7/21: Should be after ER so who knows where we are at that point.

 

[Jim Holder]

Here’s some updated TSLA trading data that just hit. Great for copium and hopium!

 

[Jim Holder]

I would worry about the 9/15 later. A lot of time value and anything can happen between now and then. I would mentally assign the 1900 shares at 245 to that position and work on getting rid of the nearer term ones.

6/16: I would close the 19x -c243.33 for this week and take the loss. They could expire worthless but you don't have the luxury of finding out because they could also be DITM by the end of the week and you'll be really screwed. Then I would maybe flip the 2x -c230 into something like 4x -p245. Let the week play out and if your -p245 go ITM then your -c225 can probably be rolled up or maybe even expire. If we do keep going up, you're stuck with those 6x -c225 but your puts expire and at least you got rid of 21 short calls for minimal loss this week.

6/23: If you are stuck dealing with the puts you sold from 6/16, at least your calls will be in better shape to roll up or close. If the puts expired, then your calls are in worse shape but now you can resell the puts and use the premium to close out some more calls.

6/30: I would close the -c300 ASAP with the same logic as the 6/16 -c243.33. Yes, will probably expire but with the leverage you have you're just not in a position to find out without risking your whole account. $4500 to close 25 contracts of exposure seems worth it to me. The -c215 and -c220 don't look great right now and you might have to let them go but it will be more clear in a couple weeks.

7/21: Should be after ER so who knows where we are at that point.

Thank you for your detailed non-advice suggestions, I appreciate it!

 

[Vova]

An idea, although not advice, if you have the cash to cover them, sell some weekly -pATM's, for every 6x of those you can buy back one of the calls...

@Jim Holder, Please take also in consideration the advice from @Max Plaid mentioned above. But be aware of the delta and gamma. That means, against the -19 calls I would not sell more than 7 weekly puts.

 

[intelligator]

I have two lousy spreads, the worst is -c237.5/+257.5 for 6/16 , 20x. I rolled to here giving back all credit, anything i close at is a loss. Being that i bit off more than i can chew, it would be huge. I can roll to next week for small debit improving by 5$ on short end. Or i can take a $9700 loss at midpoint where we sit now. What's the consensus for next week ? I don't like the Wicked view... ideal for long shares, not for BCS. The other spread is the same 20x , 20$ wide , short leg starts at -c242.5 for 6/16.

Thanks in advance for the non-advice.

 

[BornToFly]

I have two lousy spreads, the worst is -c237.5/+257.5 for 6/16 , 20x. I rolled to here giving back all credit, anything i close at is a loss. Being that i bit off more than i can chew, it would be huge. I can roll to next week for small debit improving by 5$ on short end. Or i can take a $9700 loss at midpoint where we sit now. What's the consensus for next week ? I don't like the Wicked view... ideal for long shares, not for BCS. The other spread is the same 20x , 20$ wide , short leg starts at -c242.5 for 6/16.

Thanks in advance for the non-advice.

Flip half of them to Put spreads so half are guaranteed to win? Probably a blow-off top coming for TSLA at some point, but nobody knows when. Could be after 300....

 

[BornToFly]

The problem with this week is CPI tomorrow and FOMC Wednesday. Markets may have a big reaction. 300 is more than a 20% gain for the week, but premium is worth way over the 0.2 I usually try to get (at only 10-15% OTM). So markets seem to be pricing in the possibility of a big move.

 

[elasalle]

Sold some Jan 24 380's calls for $12 in IRA.

Closed Jan 24 PUTS and am now gonna play selling weekly ATM PUT (Russian Roulette ) ... sold 5 ATM 250 stikes for like ~$9 each

Also, feel a bit butt hurt for selling Dec 25 310 calls, but am seeing 500 Dec 25's open up. So will start to leverage up on Dec 25 in personal, with proceeds from selling ATM PUTS each week - a bit at a time. Until there is a big dip, I plan to leave the 310 Calls as is and let time, luck, fate decide the outcome

 

[intelligator]

Probably meaningless, we've has more hourly red candles than green Friday to today but that happened before only to see the price continue to climb. What about the 6/8 to 6/9 opening gap, does that need filling? Looking for reasons why a halt might be possible.

 

[EnzoXYZ]

The problem with this week is CPI tomorrow and FOMC Wednesday. Markets may have a big reaction. 300 is more than a 20% gain for the week, but premium is worth way over the 0.2 I usually try to get (at only 10-15% OTM). So markets seem to be pricing in the possibility of a big move.

Does anyone remember if we got >20% weekly gain without a Tesla specific news? 295 -C and 300 -C seems to be a nice deal that far out the money.
TIA

 

[Jim Holder]

Rolled my 7X -C225 6/16 to 7x -C250 8/18 @ $0 cost. Nets me $250+22.77 premium=$272.77 per share if ITM and shares are called away then.
My plan is to start selling CSP's between now and then to collect the shares to cover. Any shares bought below $272.77 is already profit since I didn't have to BTC the 7X -C225 6/16 at a $15k loss, but it gets extra juicy if/when we get a dip to $230-220 or lower between now and then and I can pick up some shares there. Or BTC the whole contract if we get a nice steep correction (200-190) and it goes to 80%-90% gains.

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optionstrat.com

 

[intelligator]

Flip half of them to Put spreads so half are guaranteed to win? Probably a blow-off top coming for TSLA at some point, but nobody knows when. Could be after 300....

Thanks for the idea. I may open BPS for each of the spreads, selling -p237.5 and -p242.5 for this week, $20 wide, to raise cash for buy back of the -c237.5 and -c242.5 based spreads. It won't cover fully but will cover some. Rolling these out don't seem a wise move.

 

[jim0266]

Does anyone remember if we got >20% weekly gain without a Tesla specific news? 295 -C and 300 -C seems to be a nice deal that far out the money.
TIA

Last time I see something close to this w/o any news.

 

[MikeC]

I split 2x -c217.50 into 4x -c235 for this week at a small debit. Still holding more -c195/-c205/-c217.50/-c255 and would prefer not to have as many open CCs as I do, but just trying to get a few contracts closer to the money to expire or at least roll for improvement in case we are due for a dip.

 

[adiggs]

View attachment 946188

Last time I see something close to this w/o any news.

I figure this is a consequence or natural follow up to the extreme push down that we're digging back from. This is also the problem I'm wrestling with - what's a more reasonable oscillation level for the share price.

Are we going back to the 300s?

Down to the high 100s?

I don't see a new ATH with $400 becoming the new floor for the share price, at least not this calendar year, but its all really up in the air for me.

 

[adiggs]

Sold some Jan 24 380's calls for $12 in IRA.

Closed Jan 24 PUTS and am now gonna play selling weekly ATM PUT (Russian Roulette ) ... sold 5 ATM 250 stikes for like ~$9 each

Also, feel a bit butt hurt for selling Dec 25 310 calls, but am seeing 500 Dec 25's open up. So will start to leverage up on Dec 25 in personal, with proceeds from selling ATM PUTS each week - a bit at a time. Until there is a big dip, I plan to leave the 310 Calls as is and let time, luck, fate decide the outcome

Thanks for this idea. I sold some Jan '24 370 calls for $12.30. Those are shares I was going to leave uncovered, but I like the overall risk / reward. This gets me some noticeable income, with the downside that I need to sell the shares at start of the new year for 50% more than current value.

An important idea on this trade for me - these are shares I wouldn't be selling in the remainder of the year to time ups and downs. I've got other shares in other accounts that I'd sell on a spike if for no other reason I'd be wanting to raise cash and get closer to 50/50 cash / shares.

 

[treb]

I split 2x -c217.50 into 4x -c235 for this week at a small debit.

are the -c235 for this friday expiration?

 

[BornToFly]

Thanks for the idea. I may open BPS for each of the spreads, selling -p237.5 and -p242.5 for this week, $20 wide, to raise cash for buy back of the -c237.5 and -c242.5 based spreads. It won't cover fully but will cover some. Rolling these out don't seem a wise move.

Remember that we may reverse and then you are in the same predicament. So instead of doing a BPS for each BCS, flip roll half of them if you can.

 

[intelligator]

Remember that we may reverse and then you are in the same predicament. So instead of doing a BPS for each BCS, flip roll half of them if you can.

What exactly is flip roll ?