Wiki Selling TSLA Options - Be the House

[Jim Holder]

Bonus for the crew here: Cary update/summary for Friday 11/3

Overall: This rally does not have legs until TSLA closes over $226.23. A close above $226.23 can yield $255.66 in 2-3 weeks and no reason to stay short into later November.

A close below $209.51 pivots the market south into next week to $185.61 in 3-5 days and rotate off that back toward the $260's on a gradual basis.

For Friday, if TSLA opens or pushes above $219.01 we can see $226.23 and then rotate back toward $185.61 over the next 2-3 weeks.

$226.23 can be local ceiling for now and can short it for $186 if it doesn't push through.

Overall, holding below $219.01/$226.23 TSLA can fall to $209.51 and $185.61 in 1-2 weeks if closed below. $205.75 may contain daily pressures for Friday.

Lastly, $209.63-$226.23 may also be an overall bounce range.

I

 

[thenewguy1979]

DI0003 please share with us your gameplan for next week when you can. That's always a good way to end our weekend and prep for next week.

 

[Jim Holder]

 

[thenewguy1979]

Thank Jim and big dog Max Plaid. My little dog brain is kinda small. Take some times to digest

Safe play for tommorow is to short AAPL and wait till there confirmation on Tesla SP. Going to be an interesting day to end a wild bull run this week.

Good night guys or good day depending where you are. We meet in the Casino in a few hours.

 

[JusRelax]

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My problem with following this workflow is that my brain always tells me we're still at step 1.

 

[Max Plaid]

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OK, shame on me, up or down, sideways, all play out quite well from here...

Anyway, TSLA mostly recovered overnight, AAPL stayed down

But as @tivoboy rightly stated, lots of economic data today that might move things a bit

Edit: methinks they used the AAPL earnings as an excuse to easily dump TSLA AH/PM in an attempt to salvage Max Pain this week

 

[Max Plaid]

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Sorry, another long post, but we're here to learn and get ideas from each other, right?

After sleeping on this I decided some small adaptations to reduce risk, which would firstly be when selling the long calls/puts at the end of each cycle, use the proceeds to buy shares and the next set of long calls/puts - this specifically for building a $TSLA position for long term security and income generation (50c weeklies for life on 10000 shares would be enough for me)

This doesn't mean no cash in the bank, that comes from the weeklies against the long puts/calls

Also I would say avoid aggressive puts on the way up/calls on the way down, play both sides safe with low weekly premiums targets (50c to $1) and then you'll avoid 99% of reversals, it's the N/A/IITM bets that wipe you out and those moves come when you least expect, essentially random

Of course as the SP drops you could take slight more risk with put premiums, less with calls, and the converse for the trip back up

Under no circumstances sell naked puts or calls, should be dully covered with cash and shares/calls

For the examples below, scale up/down depending on your capital/share count

Actual example for the put situation:

• 200x bought +p200's @$12.4 on 9/22 when SP was ~255
• SP dropped to 190's, the puts were worth 2x = $24.80 -> this was the moment to sell
• buy 2000x $TSLA
• use the remaining $120k to buy 100x March +c240

-> Do the math and this is effective share price of $60, missed opportunity as the puts weren't sold...
-> 5x weeks to sell 200x shitputs & 100x shitcalls, assume $1 a time, so +$150k along the way

If we drop below 200 again I'm looking to go this route

Theoretical example for the call side:

• 100x +c100's bought @$11.4 on 10/31 when SP was ~195, we're anticipating a rally towards 240 - 260 in the coming hours/days/weeks/months
• selling $1 weeklies will bring in $10k per week, not zero risk, but very low and the SP has to pop some to put those ITM, and the underlying calls would go up in value rapidly too
• 115x other long calls/shares also used for another $10k
• selling puts will also bring in something, hard to quantify, probably better to keep those safe too, tbh, so $1 CSP's, let's say +$5k weekly
• if the SP drops, continue selling weeklies, but reduce the risk, drop down to 50c premiums, it's still $10k in the bag and lots of time to react to a reversal
• once the SP reaches the target zone, in this case, let's say $250, the calls will be 2x - 3x the value, sell
• buy 1000x $TSLA
• use the $120k change to buy 100x 6 month DTE +p200

-> if the SP pops to >250 by end November, the calls go 3x, the 1000x $TSLA are essentially for free
-> if the SP goes nowhere/down, then you have ~20x expirations to sell 50c weeklies to recuperate the initial cost

Going forwards, as $TSLA holdings increase, LEAPS can be sold off - or used to sell more aggressive calls, remember LEAP have a time-constraint, shares do not, so always a risk to thise and big value swing too, which can be psychologically disturbing

Is all the above 100% guaranteed to make money? Absolutely not, like all options trading strategies, it will work until it doesn't!!

 

[thenewguy1979]

10k shares? Little dog me was looking at buying 60 shares. Going be a long way for me but appreciates the sharing of the plan. Great to put those massive shares to use and making passive incomes. I learned a lot from big dog and the team here everyday. Me here just doing put and call spread for now. Maybe one day selling puts to buy shares at a start then rolling them up on call selling. One day……

Side note, what everyone plan on shorting AAPL?Earning wasnt that bad so not sure if it goes all the way down there to 162.

In regards to Tesla- DI0003 and Wicked stock are not betting on going long till SP hit 222 or 226. Guess it a waiting game to be safe?

 

[Max Plaid]

10k shares? Little dog me was looking at buying 60 shares. Going be a long way for me but appreciates the sharing of the plan. Great to put those massive shares to use and making passive incomes. I learned a lot from big dog and the team here everyday. Me here just doing put and call spread for now. Maybe one day selling puts to buy shares at a start then rolling them up on call selling. One day……

Side note, what everyone plan on shorting AAPL?Earning wasnt that bad so not sure if it goes all the way down there to 162.

In regards to Tesla- DI0003 and Wicked stock are not betting on going long till SP hit 222 or 226. Guess it a waiting game to be safe?

Little dogs can grow up to be big dogs too - I bought my first 8x $TSLA on July 10th 2015 @$270 (split adjusted $18), all I could afford! Next purchase wasn't until Feb 2016

 

[intelligator]

Sorry, another long post, but we're here to learn and get ideas from each other, right?

For the examples below, scale up/down depending on your capital/share count

Actual example for the put situation:

• 200x bought +p200's @$12.4 on 9/22 when SP was ~25

Theoretical example for the call side:

• 100x +c100's bought @$11.4 on 10/31 when SP was ~195, we're anticipating a rally towards 240 - 260 in the coming hours/days/weeks/months

Thanks @Max Plaid for another valuable post !!! You are buying calls/puts 6 months out at beginning and end of cycle. What drives the strike you chose in the actual and theoretical trades you exemplified? Are you choosing a delta or strike distance from spot to stay consistent?

 

[UncaNed]

I wonder what's driving this price action up these last 20 minutes?? This past week has made me all antsy and I feel like I should be planning to DO something...

 

[SAPharmD]

I wonder what's driving this price action up these last 20 minutes?? This past week has made me all antsy and I feel like I should be planning to DO something...

Does it appear fake to anyone?
Does it appear possible that we go up to ~$250s again then retrace back below $200 next year during the sell off/recession?

 

[Max Plaid]

Thanks @Max Plaid for another valuable post !!! You are buying calls/puts 6 months out at beginning and end of cycle. What drives the strike you chose in the actual and theoretical trades you exemplified? Are you choosing a delta or strike distance from spot to stay consistent?

It's a bit of a new strategy, previously I was buying LEAPS, but the long time-frame and high cost makes them a little tricky if things go against you

I'm always thinking of the plan B, i.e. what if I buy calls and the stock goes nowhere or down, the escape-route then is to be able to sell weekly premium until expiry that will recuperate the initial cost, ergo if you pay $12 for a March expiry, you have 20 weeks to get that $12 back, 50c per week should be possible

 

[juanmedina]

I wonder what's driving this price action up these last 20 minutes?? This past week has made me all antsy and I feel like I should be planning to DO something...

The jobs data was good and the 10-year is dropping. I am not feeling confident either the macro has changed to the upside it seems.

 

[Max Plaid]

I wonder what's driving this price action up these last 20 minutes?? This past week has made me all antsy and I feel like I should be planning to DO something...

Employment numbers: people losing their jobs and earning less, so equities go up - seems totally ridiculous and counter-intuitive to me, but there you go!

(yes, yes, I understand it's because of interest rates and bond yields, etc., but a weaker economy = less spending power = less goods sold = less manufacturing = lower EPS, so yeah, OK...)

 

[SpeedyEddy]

Are we still betting on a pump to $240 and a retracement to $140? Or $194 is already base and we rocket from here? This week pump was a curve ball that took us by surprise with how swift and strong the upward momentum was....

Monday changed call to put. Tuesday SP rocketed and never come back down.......

Maybe more like 240. 212.(ending wave 5) then accumulate to 340. Back to 300. Then ATH maybe after Q1

 

[intelligator]

AH and PM traders get the added benefit to snag these profits , while they sleep.

 

[Max Plaid]

The jobs data was good and the 10-year is dropping. I am not feeling confident either the macro has changed to the upside it seems.

Now we all get stressed over our -c230's instead of the -p200's earlier this week

 

[SAPharmD]

Maybe more like 240. 212.(ending wave 5) then accumulate to 340. Back to 300. Then ATH maybe after Q1

I thought wave 5 is moving down with time, rather than up. It's currently at ~185 and moving downward daily/weekly...

 

[Jim Holder]

Looking to sell the 11/17 10x -cc220 for 7.75-7.95$

Are you keeping those?