Wiki Selling TSLA Options - Be the House

[adiggs]

The time to buy LEAPS is when we're at the bottom, then buy close to the current share price - if you get in low and the SP takes off then they are greatly de-risked by a lot of the value flipping from extrinsic to intrinsic - write against them on the way up to increase profits, mostly I'd say a few months out at very OTM strikes

I decided today to close my long Jan '25 200 strike calls. This leaves me about as delta neutral as I think I've been since 2013 - primarily achieved via cash, but helped along via share ownership matched up with DITM cc.

EDIT to add: I don't want my LEAPs to get anywhere close to expiration. A little over a year out is earlier than I thought I'd be closing them out, but I want the positions closed before I get down to 6 months. This decision supports that desire. If we do see a pullback then I will get push out my expiration by a year or more, and get back into the position. /fingers crossed


I've gone ahead and opened Oct 13 240 strike puts for about $2. I will wait for at least tomorrow to open Oct 20 puts. I'm even hoping for a significant drop in the share price now as I'll use that to rebuy the leaps, as well as buying shares that will back cc sales.

 

[Jim Holder]

The time to buy LEAPS is when we're at the bottom, then buy close to the current share price - if you get in low and the SP takes off then they are greatly de-risked by a lot of the value flipping from extrinsic to intrinsic - write against them on the way up to increase profits, mostly I'd say a few months out at very OTM strikes

I saved this. Thanks for the insight. Was going to re-buy my +C150 12/2025 LEAPS on this relative strength above $255 but I will wait now to see if we get a new bottom soon.

 

[SpeedyEddy]

20 Day MA is giving support at the moment. 50 day MA is just 7 dollar below (250), so for the coming days, that could be interesting levels to bounce from and if broken, stay below.

 

[SpeedyEddy]

Watch out!, we maybe get a reprisal of Yesterday's move

 

[Jim Holder]

Watch out!, we maybe get a reprisal of Yesterday's move

Reprisal as in revenge down?

 

[SpeedyEddy]

Reprisal as in revenge down?

no, another run up, it's looking very nervous on low volumes, it looks like retail is making the market (like yesterday)

 

[juanmedina]

no, another run up, it's looking very nervous on low volumes, it looks like retail is making the market (like yesterday)

I may close my short here and try closer to ER. Kia and Hyundai will use the Tesla superchargers. Cybertruck release might but I up that should be last short term catalyst.

 

[SpeedyEddy]

I just closed my last -call (leaving a loss alas, but happy not to have witnessed another run-up of 6% while holding these) and even bought back a bunch of shares for the first time. Maybe will toss them (partly) later ahead of tomorrow. (no capital gains tax over here)
Still holding puts (and maybe will extend that position later today as well)

 

[MikeC]

Still holding 80x -250c/-255c/-257.50c for Friday, offset a bit by a handful of -p257.50/-p260.

 

[adiggs]

I've gone ahead and opened Oct 13 240 strike puts for about $2. I will wait for at least tomorrow to open Oct 20 puts. I'm even hoping for a significant drop in the share price now as I'll use that to rebuy the leaps, as well as buying shares that will back cc sales.

I also went out to March '24 (5-6 months) and sold 350 strike calls for $10. I just recently closed a similar position for roughly 50% gain (open @ $12, close @ $6) using Jan '24. I found that I rather like this sort of position - sitting here today I am very comfortable selling shares at that strike if I really need to, the cash flow isn't bad, and maybe best of all - the position uses very little mental energy.

 

[ReddyLeaf]

QTA range

Thursday Range High: $264.65
Thursday Range Low: $255.35

Just for kicks, I sold a handful of 1-DTE ICs to see if the options market drives the SP into the middle:
+p245s/-p255s/-c265s/+c275s

Edit: also decided to try some 1-DTE 10x ICs on RIVN for more experience. I might lose the $1000 backing, but still an interesting learning experience. Note that RIVN options are definitely less liquid than TSLA and I lose on both sides of the bid-ask spread.
+p18/-p19/-c20/+c20 at something like $0.45 (45% return if expiring worthless).

Also, put in an order to roll most CCs out and up to Jan2026 -c350s. 1x hit my $20 cr requirement, but not much trading out there so still waiting on the remaining ones. This is in anticipation of dropping out of the weekly options scene in the near future, more than it being a good time to trade the LEAPS. My future project looks to be a go, so will be closing out everything and going dark in the next few months. No worries here. As always, GLTA.

 

[Jim Holder]

My -C260's 10/6 (tomorrow) are hanging in there, still watching to see if to close/roll/bounce/leave alone.

STO 10x -C275 10/13 @$2.05
STO 10x -C280 10/13 @$1.40
These are based on GEX walls for 10/13 being heavy on $270 (should be good resistance if even tested) and 275 and 280 smaller walls behind them. Will add if we get a Friday push.

 

[john tanglewoo]

I am holding 20x -C280 10/20 @$4.45

Was thinking of adding more today as they are now above 5, but going to wait.

 

[Right_Said_Fred]

I paid $12.4 for my March +p200's meant to buy 100x, but somehow ended up with 200x, but decided to keep them anyway. These were partially financed by November 100x +p200's that gave back +100% profits in the course of a week, so I started from a good situation

I'm holding these until expiry, probably. Yes, it's likely to be $250k that will fizzle to zero, but they also provide a lot of insurance over the next 5 months in a very volatile markey

In order to not actually lose any money, I'm selling 70x - 100x weeklies against them for around $4, so all being weak, by the end of October I will have taken premiums back to cover the initial cost, everything after that is profit. If the SP shoots up I'll sell 50c weeklies against the lot, that also bring-in enough income to cover them

But the main strategy is to write 70x, thus leaving 130x contracts (+20x +p270's I left unused) for wiggle-room in case we get a crash/correction at any point - I already took back $60k from the initial $245k cost and will be another +$15k if the SP closes above $255 this week

So yes, I believe you can have your cake and eat it

Can you explain how that works, buying longer dated puts and then selling shorter dated puts against them. When you have +p200 for 2024 and -p250 for next week, what would you do in case the SP slowly drifts to 240 next week? And what if it drops overnight to 240 on bad news? Would you roll? Would you close everything?

 

[Jim Holder]

QTA weekly resistance seems to be holding the line:

For tomorrow's options expiration we're sitting right between largest call wall ($265) and next largest ($260), and MM have incentive to close beneath all.
MP is $252.50. Will be interesting to see how this plays out.

 

[intelligator]

Considering rolling 2x -c252.5 to next week -c257.5 for zero or tiny net debit. It'd be a $5 improvement, leaving about 4.70 credit per contract to work with that I'd rather keep and deal with next week. Am I thinking this one right or would you roll for credit same strike? Not going to do anything with -c260 until Friday.

EDIT: Rolled to 10/13 -c257.5 for -.10

 

[Knightshade]

I've still got a bunch of -260c for tomorrow... currently better off letting em exercise than rolling (tax-free account so not a factor there) and then selling ATM puts but we'll see how things look tomorrow afternoon I suppose.

 

[Jim Holder]

Just in time for those of us with NTM/ITM short calls

 

[Max Plaid]

Can you explain how that works, buying longer dated puts and then selling shorter dated puts against them. When you have +p200 for 2024 and -p250 for next week, what would you do in case the SP slowly drifts to 240 next week? And what if it drops overnight to 240 on bad news? Would you roll? Would you close everything?

Good question, and this is where only writing 70x short puts when you have 220x available long puts available bears fruit

So the 200x cost me $12.4, $245k, if I can write 70x weekly for $4, that's $28k, 9 weeks if it all goes in my favour and I've repaid the initial investment and the +puts still have 12 weeks, or something like that to run, to scalp some more premium and keep as downside insurance

What indeed if tomorrow I write 70x -p260 for next week, with the SP at 260 and the SP drops to 240 by next Friday. The initial premium will be around $6.50, but they'll be $20ITM, so staring at a loss of $13.50 per contract

What are the options:
- 20/10 Freeroll down to -p257.50
- 20/10 Double-up the contacts to 140x gives a freeroll to -p245
- Rolling out three weeks to 3/11 @$16 & writing 70x 20/10 -p240 @$8

My favoured "escape plan" is the three-week roll, if the 20/10 -p240's go ITM - let's say $220, I roll them out three weeks out and down again, then I write 70x ATM for 27/10, each set I'll be taking time-value as they're ATM, and will roll them out and down again, while the underlying long puts will be gaining value

At the same time I have 70x -cATM I can write, so they double-up the weekly premium, but obviously I wouldn't want to chase those down to the low 200's, would end up getting burned on the way back, no my preference with those it to get them rolled up from -c240 to -c260 this week, then above -c270 I'll start writing further out and will look to sell the underlying shares and LEAPS, or roll them out to January, haven't decided yet, on one hand there'd nice premiums developing at Jan -c300, but the lure of putting $700k cash back into my account, especially when playing with so many puts, is quite strong... don't know

Now what to do form here? I feel like -p260 is about as high as I want to go with short puts, so an -ATM straddle this week to pull the calls up, assuming the SP stays where it is for tomorrow's close

Sorry, lots of blah blah blah there...

 

[adiggs]

Can you explain how that works, buying longer dated puts and then selling shorter dated puts against them. When you have +p200 for 2024 and -p250 for next week, what would you do in case the SP slowly drifts to 240 next week? And what if it drops overnight to 240 on bad news? Would you roll? Would you close everything?

It's the same as the poor man's covered call, but with the other direction.

So - by owning long dated puts, the limit on downward moves is the strike on those long dated puts. Those provide the backing for margin purposes for selling short dated puts. In the extreme, the low DTE short puts get rolled to the same expiration as the long puts, both go to expiration, and the loss per contract is limited to the short put strike minus the long put strike.


Pretty sure that the strategy in the event of your scenario is to roll the short dated puts, probably for strike improvement, if the share price gets close to 250. Those are the best rolls and because delta on the short and long options can get upside down relatively easy (delta on the sold put is higher than delta on the long put), management tends to be more aggressive.