Wiki Selling TSLA Options - Be the House

[SAPharmD]

With this outlook you might consider not reading this thread. I'm sure it'll be entertaining, which is its own good reason to read , but we've also got an outlook and activity that can't help but keep today's share price top of mind.

A big part of what made buy and hold work so well for me previously is that I would go weeks at times not knowing the share price. That only could happen because I didn't care what the stock price was - I knew it hadn't 10x'd yet, and I knew that my fundamental investment thesis hadn't changed or been violated, and nothing else mattered. I did read the main investor's thread throughout, and this forum more broadly, but it was all about the mission, products, strategy, etc.. stuff. That got me enough exposure to ongoing share price gyrations.


I am definitely not trying to chase you off!! Just something to think about.

No worries. I have put that outlook on pause until I figure out where/when to re-enter this market. Apparently I jumped the gun yesterday. Even if I have to wait a couple more months, I'm in no rush.

 

[adiggs]

No worries. I have put that outlook on pause until I figure out where/when to re-enter this market. Apparently I jumped the gun yesterday. Even if I have to wait a couple more months, I'm in no rush.

Nice thing about a long term buy and hold view of the company - buying today at 202, or last week at 230 (I did some of that), or next week at any price between 160 and 240 doesn't actually matter at all. Well - it doesn't if you share something similar to my own view on the share price ($4000 by 2030) that will adequately represent the value the company is creating in the world.

Whether I bought my original shares at $25 or $37 back in 2012 doesn't matter a lick today - after splits they're $2 today. Whether that is 1.80 or 2.20 doesn't really change things

As a result - the biggest risk isn't entry price; it's lack of entry. So I'd say that you didn't jump the gun at all yesterday - you got in just in time!

 

[tivoboy]

If no new interest rate hikes tomorrow, maybe we get back over 210 by Friday?

No new rate hikes is the default assumption, so doubt it would have an effect… employment Friday might be more of a market mover.

 

[tivoboy]

Calls coming alive again for 11/3 as ppl cashed in their puts:

View attachment 986788

That’s the way the MM do it… everyone to the LEFT, then everyone to the RIGHT.

Max pain for Friday 11/3 is also ~ 207.5$, it’s probably not too costly to get it there for Friday.

 

[tivoboy]

So is this afternoon’s $5 bump random walk, options push-pull, TA-related, or Giga Mexico news?

My guess is options push - pull. I don’t think the Giga Mexico news is that compelling.. it’s not like they weren’t going to get the necessary approvals. My understanding is that it is actually TESLA that is throttling the overall timeline. Probably rightly so at this point in the cycle.

 

[Max Plaid]

Well, I missed the boat today for selling some puts for this week, didn't expect the SP to stay green to be honest as the broader markets looked weak

Got some FOMO towards the close and was eyeing 50x -p195 @$2.3, but missed it by 4c

Let's see what tomorrow brings, I might be delighted with that sell not triggering, or not, we shall see!

One thing for sure, I will sleep better with those dITM -p220's out of my portfolio!

 

[intelligator]

At the first visit to SP @ $200 I took profit by closing for .50 on initial credit of 1.20 , two BPS for 11/3. At the next visit to $200 I opened an IC +162.5p/-182.5p/-220c/+240c for .50 , will pick a side tomorrow, ideally we'll sideways trade within the bounds, leave until Friday.

 

[Cherry Wine]

Do call-side premiums seem quite low at the moment to anyone else, or is it just me?

 

[intelligator]

Do call-side premiums seem quite low at the moment to anyone else, or is it just me?

+1

For 11/3 as example, same delta of .05 and distance from spot, p182.5 is .34, c220 is .23 .. never understood pricing. When there's this much a difference, is it tell-tale of direction?

 

[Max Plaid]

Not for discussion here, but I note that there's a new Joe Rogan interview with Elon, I imagine the MSM and Shorty are combing through it as we speak, and I expect a load of FUDlines to come out of it

Hopefully he stayed off the dope this time...

 

[EVMeister]

Not for discussion here, but I note that there's a new Joe Rogan interview with Elon, I imagine the MSM and Shorty are combing through it as we speak, and I expect a load of FUDlines to come out of it

Hopefully he stayed off the dope this time...

Haven't seen the whole thing yet. The podcast started with them smoking, but looked like normal cigars and no talk of any drugs.

 

[thenewguy1979]

+1

For 11/3 as example, same delta of .05 and distance from spot, p182.5 is .34, c220 is .23 .. never understood pricing. When there's this much a difference, is it tell-tale of direction?

Would like to know that as well. Perhaps someone can enlighten us.

On a side note - my new broker (tradestation) is allowing 0DTE. Not sure if long term that a good thing or not, but option are dirt cheap...and can be held till 4pm at closing. Perhaps good for those crazy wild day.

 

[Jim Holder]

+1

For 11/3 as example, same delta of .05 and distance from spot, p182.5 is .34, c220 is .23 .. never understood pricing. When there's this much a difference, is it tell-tale of direction?

Yes. @dl003 tracks this and it worries him when calls become cheaper than puts as it’s a decent signal.

 

[SAPharmD]

Yes. @dl003 tracks this and it worries him when calls become cheaper than puts as it’s a decent signal.

What does that signal? Which direction?

 

[Jim Holder]

Haven't seen the whole thing yet. The podcast started with them smoking, but looked like normal cigars and no talk of any drugs.

They opened with talk about CT and Elon reiterated several times how auto production is “insanely hard, I mean extremely difficult…”. Not sure why he keeps drilling this line lately over and over as if it’s some new revelation. He’s certainly produced millions of cars already over the past many years and has several factories humming along.

 

[Jim Holder]

What does that signal? Which direction?

I’ll let @dl003 answer since I may misrepresent what he meant. If I understood it correctly, falling call premium=bearish.

 

[tivoboy]

What does that signal? Which direction?

Usually lower..ppl only pay up premium for CALLS if they think they can make money on it. It gets cheaper, when fewer ppl want it, indicating moves in the OTHER direction are more likely. Ppl pay MORE for puts when they are more worried about stock prices going down, it’s insurance.

 

[Jim Holder]

Usually lower..ppl only pay up premium for CALLS if they think they can make money on it. It gets cheaper, when fewer ppl want it, indicating moves in the OTHER direction are more likely. Ppl pay MORE for puts when they are more worried about stock prices going down, it’s insurance.

Makes sense. How does this work practically, is someone really setting prices for the platforms during the day? I thought premiums are mainly tied to IV and SP. How does the option chain know if less people want it and hence lower premiums?

 

[tivoboy]

Makes sense. How does this work practically, is someone really setting prices for the platforms during the day? I thought premiums are mainly tied to IV and SP. How does the option chain know if less people want it and hence lower premiums?

What most ppl don’t really realize is that options are a caller auction. If there is no option out there, I can put it out there and put a price on it. OK, I get it, too many puns - not intended. But normally there are options already out there, and we either like or don‘t like the price. If there isn’t movement on something, we can always put something out there - usually with a lower price. So, if there are no bidders, price lowers, if there are more bidders than sellers, price inflates. At this point in the derivative worlds history, 95%+ is programatic based on IV, delta, gamma, theta, uma, etc.

The chain knows all - in that the clearing organization sees how many interested parties there might be, how many people are tracking what, how many offers to buy and sell at what price are out there - stop loss, entered sell, etc. It’s a pretty well understood - rigged game. Don’t get me started on payment for order flow. Might as well be little thought bubbles above everyone’s head at a Christie’s auction.

 

[dl003]

Makes sense. How does this work practically, is someone really setting prices for the platforms during the day? I thought premiums are mainly tied to IV and SP. How does the option chain know if less people want it and hence lower premiums?

IV is an inferred value, meaning premium dictates IV, not the other way around. Premium is influenced by supply/demand. Where there is higher supply than demand for call, it means big bois are positioning defensively. That leads to lower premium -> lower call IV.

Today call premiums were not supporting a 1.5% up day. IVs steadily declined all day.