Wiki Selling TSLA Options - Be the House

[Knightshade]

Feels like too much optimism for me right now. I expect a lot of the narrative on the Cybertruck to be that Tesla will need to sell it at a loss to get their volumes, wait until the price drop, etc.

AFAIK Tesla has never, going back to at least the 2012 Model S, sold a vehicle for negative gross margin.

 

[scubastevo80]

Decisions decisions - sitting on $250 puts expiring Friday and debating whether to roll today to take advantage of pre-earnings IV, or close them out (they're up 85+% now) and reopen tomorrow.

 

[mongo]

AFAIK Tesla has never, going back to at least the 2012 Model S, sold a vehicle for negative gross margin.

Automotive in total hasn't been gross margin negative (other than the post Roadster, start of S in Q3 2012), but ramping vehicle models have been margin negative since then:

Q3 2017 update letter "We expect Model 3 non-GAAP gross margin to reach breakeven by end of Q4, because of increased capacity utilization, and it should improve rapidly in 2018 to our target of 25%.

Q3 2018: "Model 3 gross margin turned slightly positive in Q2, expecting roughly 15% in Q3"

However, Model Y was gross margin positive in its first production quarter, Q1 2020.

 

[elasalle]

stratagizing ...
.Roll 350 March CC to Jun 350 and get $10 (on day of earnings).

1. If SP goes south, you made $10 more
2. If SP goes north, you have one more roll option to Jan 25, 400. (For me this is not so bad, $50 move , gives me 2X yearly mortgage interest for the wait)

Risk, SP goes down below $250. on upside CC already deciding exit price and I also have opportunity to roll ..so less of upside risk.
So mainly overall macro risk, is what I can think of.
Also I don't want the CC's to hit by Aug, so atleast 2/3rd of my shares can qualify for long term cap gains if called)

The $10 gives me 3 mths of mortgage interest up front, which is same as 3 moths roll from Mar to Jun .... I think I am gonna do it at open ... cheers!!

*Done. 1 mth back I had sold Dec 25 300 calls for the same shares, so feel like I dug myself out of the hole .. 350, 400 all looks good to me.

 

[Knightshade]

Just as update, closed the puts at 50% profit a minute ago... PROBABLY I could've held to close just fine, but if earnings are bad enough to knock 15% off the SP in a day I figure they'd have to be bad enough to let me open something even better without having 6 figures in cash locked up securing those puts.

All the short calls remain open (and down about 20% now) but still pretty unconcerned there

Rolls my friday calls while IV was still high to next friday.... some $330 strike (from 330 now) and some $340 strike (from 342.50), $2.20 and $2 respectively net credits on the rolls.

These are all in non-taxable accounts so if there's an unexpected blowout and I have to let em go I can live with it (or probably safely roll up/out unless it spikes crazy fast tomorrow morning)... but if not I'm happy to take >$2 on average for 1.5 weeks of time and over 10% OTM strikes.

 

[intelligator]

All bets on 300, wow. 270-290 gamma is still a thing...

 

[Max Plaid]

OK, that was an intense 30 minutes...

- bought back 30x -c270 for this week at $295 SP
- tried to sell 3000 TSLA order at $296, SP was up $296.50, didn't trigger, nothing
- split into a smaller 1000x order at $297 and it executed
- did another batch of 1000x, went through and sold
- then I noticed that -c290's were priced at $14, so I decided to hold 1000x shares and sold 10x of those for $14.1
- then sold 20x -p290 for $8.1
- finally, with the proceeds, bought back 3x October -c200's and sold another 3x -c290's

So, going into earnings for this week's expiry, I'm holding:

50x -p290
24x -c270
4x -c287.5
13x -c290

Let's see where we are tomorrow as to what needs to be "sorted out"

Note it's FOMC next week, so this might keep IV a little elevated

 

[intelligator]

I have 2x 8/18 -C225 that still have a few dollars extrinsic (about 2.37 , SP @ 297.90). Rolling up and out $5 to September is at debit, October is first credit. Reading into dealer positioning and other perspectives, seems SP is expected to retract some. It's two contracts, so it wouldn't be terrible if I have to keep rolling for small credit or even strike. Trying to decide if I should wait for extrinsic to run out before I make another move. Thoughts?

 

[UltradoomY]

Hard to stay away -
STO $300C - $10.50 each
STO- $325C - $3.25 each
BTO - $275P - $2.25 each

Small positions but playing with earnings is hard to walk away from. Plus I am thinking to convert some core shares to cash for a business venture that I started late last month and wouldn't mind the extra capital.

Cheers and good luck to all

Edit - for clarity

This is for 07/21 expiration - it is a monthly and max pain is way below us - so reasonable expectation for a sell off for how much we have run up.

 

[tivoboy]

Hard to stay away -
STO $300C - $10.50 each
STO- $325C - $3.25 each
BTO - $275P - $2.25 each

Small positions but playing with earnings is hard to walk away from. Plus I am thinking to convert some core shares to cash for a business venture that I started late last month and wouldn't mind the extra capital.

Cheers and good luck to all

Is this all weekly? Will be interesting to see how this plays out (I’m setting up a tracking on this trade), me thinks you’re going to come out well..TWT

 

[elasalle]

Closed 6 Mar 350 put’s for a quick 3K, risk off
If there is sell off before 4 pm will add them back…

 

[ReddyLeaf]

Hard to stay away -
STO- $325C - $3.25 each

Same, though I only got $3.20
Also rolled -c302.50s to 7/28 -c310s for $0.30 cr
Closed all remaining 7/21 BCS side of ICs (for losses of course)
Left with 7/28 IC: +p250/-p270s/-c315s/+c335s at 50% profit
Left with 7/21 BPS: +p270/-p280s at 70% profit
probably should close everything but……

 

[UltradoomY]

Is this all weekly? Will be interesting to see how this plays out (I’m setting up a tracking on this trade), me thinks you’re going to come out well..TWT

Yes - all Friday expiration.
I'm still long a good number of shares outside this for upside protection but definitely don't mind having shares called away at these prices.

 

[SpeedyEddy]

For today I expect no longer a SP of $312 , so my plan to sell shares is not worth the risk at this level and thus I just closed my -P187.50 on a 50% gain in two days. Nobody has any clue about what to expect for tomorrow, so for the moment I hold on to all shares and my -CC 380 for sept 15 (which sold on the theory that SP $380 so soon would cause a sell-off for sure).
[EDIT Nice timing(SP 197.5 when BTC P187.5)it seems / EDIT]

 

[SpeedyEddy]

Feel the same. Don’t know how the situation is in other countries, but if you often check the inventory cars, you’ll see these are sold with massive discounts:

- Model 3: -4000 to -6000
- Model Y: -2000
- Model X & S: -7000 to -8000

These are inventory cars of course, so need to see the whole picture, but just saying that only taking the price cuts in your calculations won’t be enough…

Considering price action I suspect a sell off after earnings, since we had a big run up into earnings and that tends to trigger sell off after. Whatever they may be.

But I expect some COGS dropping too because of re-negotiations on lithium deals, so there are far to many variables we really don’t know about to be close to guess EPS, which will be everything, so only think long term (and keep on watching banks and (real-estate thingys) China, which seems to unfold coming months.)

 

[SebastienBonny]

I have 2x 8/18 -C225 that still have a few dollars extrinsic (about 2.37 , SP @ 297.90). Rolling up and out $5 to September is at debit, October is first credit. Reading into dealer positioning and other perspectives, seems SP is expected to retract some. It's two contracts, so it wouldn't be terrible if I have to keep rolling for small credit or even strike. Trying to decide if I should wait for extrinsic to run out before I make another move. Thoughts?

I got one for next week. Will wait what happens today after hours. If we go up further that contract is gone and will start selling put. If we go down to 250’s - 260’s, I will keep it and roll it at the same strike. My idea was to wait for extrinsic to run out before rolling. Now about 1 in it.

 

[tivoboy]

But I expect some COGS dropping too because of re-negotiations on lithium deals, so there are far to many variables we really don’t know about to be close to guess EPS, which will be everything, so only think long term (and keep on watching banks and (real-estate thingys) China, which seems to unfold coming months.)

From a true GAAP accounting standpoint they have to FIFO inventory or materials and related pricing. Not sure how much advance inventory they have for all the inputs, and not sure how they would message this other than to say “we expect COGS going forward to come down XYZ %”

 

[SpeedyEddy]

From a true GAAP accounting standpoint they have to FIFO inventory or materials and related pricing. Not sure how much advance inventory they have for all the inputs, and not sure how they would message this other than to say “we expect COGS going forward to come down XYZ %”

Ok, thanks, I learn more about GAAP every day, but I think that Tesla has a more JIT kind of approach for goods to be delivered and inventory maybe for max 5 weeks or so. The best warehouse being no warehouse. (I don’t know if you know but in fact Tesla uses the docked trailers as temporary warehouses all the time, at least in Berlin!)
[edit; not in your hometown indeed /edit]

 

[MikeC]

Closed out some 275p near the high and then flipped 2x -c275 to 2x -p300/-c300 after we dipped. Right now I have -c230/255/275/300/310/320 and -p300/285/280/275 for this week.

It's interesting right now that we've been rallying even though margins are widely expected to still be low. Not sure what will be obvious in retrospect - that the stock was getting ahead of itself or that smart money is accumulating ahead of Q3/Q4. I'm going to throw out a guess we get a close right around 300 on Friday - nice round number for monthly expiration and a lot of FOMO calls will expire.

 

[SpeedyEddy]

@dl003 would this be the 296 ceiling which we bumped our head into (and…. Did you do IT -besides closing the ATM -P)