Wiki Selling TSLA Options - Be the House

[Right_Said_Fred]

If you had shares from 2016, I bet you wouldn’t risk paying huge capital gains when sold calls get assigned in return for measly weekly pennies as premium on those sold calls . You will be a HODLER .

So glad I live in a country when we don't pay any taxes when we sell shares (or when calls get exercised). If I would have to factor that tax loss in for my trades I wouldn't sleep at all after selling calls.

Here in The Netherlands we get taxed on the basis of an assumed yearly return of 6% on investment accounts, which amounts to a tax of about 2% on the value of all funds and shares in the investment account, no matter how much you made (or lost). In the years when TSLA had returns of 300-400% it was virtually tax free money. There are plans to move to a more fair system where the actual returns are being taxed, but with the disarray our politics and our tax service are in it will probably take a few years to get that off the ground.

 

[SpeedyEddy]

Here in The Netherlands we get taxed on the basis of an assumed yearly return of 6% on investment accounts,

And I would suggest (being invested in non-dividend shares only) you can successfully oppose to paying these at all if real income is lower then 6%. Will be ruled next year

 

[Right_Said_Fred]

And I would suggest (being invested in non-dividend shares only) you can successfully oppose to paying these at all if real income is lower then 6%. Will be ruled next year

But my real income from shares and options isn't lower than 6% This is TSLA options trading after all.

 

[SpeedyEddy]

Good volume, but still no short-squeezing signs, let alone gamma squeeze. call wall rising. Switching over to the bears.

 

[tivoboy]

Outside reversal incoming.

 

[john tanglewoo]

If you had shares from 2016, I bet you wouldn’t risk paying huge capital gains when sold calls get assigned in return for measly weekly pennies as premium on those sold calls . You will be a HODLER .

If I have hundreds of share from 2016 I would be doing CC all days. Win win. Get paid to sell your stock as today price. If dont get assigned - free money basically. Rinse and repeat.

I have tens of thousands of shares that were purchased in 2012. In fact I have bought only several hundred shares between 2012 and now, and I have not sold a single share, or lost them due to CCs. I bought them shortly after buying my Tesla Roadster! That was when I knew the dream was possible!

But yes, I do stay awake sometimes at the risk of any CC shares being called.....so I usually pick strikes well out of the money in line with the monthly variance. If it gets too hot, I am rolling all day to avoid getting called away.

I'm in a terrible position with NVDA right now where I sold my whole 2mm position in CC's at 250 strike for next June back when it looked like the stock was going to 150. Since then I had to pay hundreds of thousands to roll that to the 350 strike, where I still currently stand.

In that case I don't want the shares to get called away either (cost basis of $38 from back in 2017), and I also don't want to lose all the upside the stock has had from 350 to where it sits now. So I will likely continue to roll these if it ever comes back down to earth, which it might not! But my goal is to try and get out of the calls one way or another while still retaining my shares.

At least these rolls count as massive capital losses so it gives me the flexibility to offset some gains and rebalance the portfolio.

 

[elasalle]

If you had shares from 2016, I bet you wouldn’t risk paying huge capital gains when sold calls get assigned in return for measly weekly pennies as premium on those sold calls . You will be a HODLER .

Paying taxes is part of the game. So many did not sell at ATH based on tax implications ... my personal account peaked at 1.7M .. and still did not sell

For US based, best is to atleast make sure you are not paying short term capital gains by holding on to stock for more than a year. ...

 

[Jim Holder]

Outside reversal incoming.

What does that mean?

 

[Tachyon]

For us midwesterners it Means-
it’s cold outside. Get in the house ./s

 

[EVNow]

For us midwesterners it Means-
it’s cold outside. Get in the house ./s

Well, its cold here in Seattle too. Not WI cold, but freezing cold.

 

[Jim Holder]

The tango:

 

[intelligator]

I've yet to roll 12/1 -c250 , would rather not , trying to make sense of what is going on. SHould I take the move now that the SP has come down some or wait it out? What I am most puzzled by is what to expect next week. Meaning, will the roll have a snowball effect?

Nothing we all don't already know. Continued call interest and loss of above and below 247.5 ... put call ratio .92 , highest call wall at c245, c250, puts even at 1/3 interest of those two peak, p235, p240

 

[MikeC]

I’ll be shocked if we don’t get a sell the news tomorrow or Friday. I know anything is possible but after all these years it’s like expecting Lucy not to pull the football away from Charlie Brown.

 

[Max Plaid]

I have tens of thousands of shares that were purchased in 2012. In fact I have bought only several hundred shares between 2012 and now, and I have not sold a single share, or lost them due to CCs. I bought them shortly after buying my Tesla Roadster! That was when I knew the dream was possible!

But yes, I do stay awake sometimes at the risk of any CC shares being called.....so I usually pick strikes well out of the money in line with the monthly variance. If it gets too hot, I am rolling all day to avoid getting called away.

I'm in a terrible position with NVDA right now where I sold my whole 2mm position in CC's at 250 strike for next June back when it looked like the stock was going to 150. Since then I had to pay hundreds of thousands to roll that to the 350 strike, where I still currently stand.

In that case I don't want the shares to get called away either (cost basis of $38 from back in 2017), and I also don't want to lose all the upside the stock has had from 350 to where it sits now. So I will likely continue to roll these if it ever comes back down to earth, which it might not! But my goal is to try and get out of the calls one way or another while still retaining my shares.

At least these rolls count as massive capital losses so it gives me the flexibility to offset some gains and rebalance the portfolio.

Of course if you have tens of thousands of shares then you can write extremely OTM calls and still get a good weekly income, so the risk is dramatically reduced

I bought 9000 shares between 2015 - 2019 then sold them all towards the end of 2021, bought them all back pre-1:3 split, expecting a run, up, we got the opposite, then I got assigned puts as the stock crashed through the end of last year and held nearly 12k $TSLA at one point, but then allowed the lot to assign on -c150's in May this year and flipped to LEAPS

Not always the best decisions, but I've still ended up with way moreover the years than had I just HODLed...

selling naked calls have made me realize that holding shares and selling calls are 2 separate decisions and I should try to get the optimal result for both. I sell naked calls on a lot of stocks: NFLX, NVDA, SPY, FDX etc... and I don't own any of their stock. So if I do it wrong, I can lose a lot. I apply the same thinking to TSLA although my cost basis is in the $2x. I don't think I have a predetermined price I'm comfortable with selling at.

I think every single options book I've ever read says to never, ever sell naked calls - of course we do it with puts as there's a limited downside, but calls can in theory bankrupt you if not covered

I guess you're not going big and you have a decent pile of cash/margin on hand?

I'm also heading halfway there with my calendar spread strategy, although I'm looking to start buying shares again, on a weekly basis from premiums, but first I have a cash target to reach in my account, then I start accumulating

 

[Max Plaid]

Pfff, was out walking the dogs when the SP dropped to low 245's, I would have bought back the -c260's I sold earlier for nearly 50% gains had I been home, ah well, was a good trade regardless, very happy with that

 

[Jim Holder]

Bookmap mid-day update, 255 and 260 now dominate. But @BornToFly was right to point out several days ago that the huge order volume sitting at levels aren't THAT significant since they can be churned through in seconds (I witnessed that this morning with nearly 300k sitting at $250, burnt right through in 2-3 seconds). That said, it may be one of several indicators to keep in mind to get a sense where orders are sitting at.

12:35pm EST:

 

[vikings123]

I’ll be shocked if we don’t get a sell the news tomorrow or Friday. I know anything is possible but after all these years it’s like expecting Lucy not to pull the football away from Charlie Brown.

But as eternal bulls we always fall into the trap that this time the "markets will see it". I'm with you but just like we never understood what the hertz gamma squeeze was about we will never know what the market wants to do after the CT event.

IMO, sticking to technicals is a much safer bet.

 

[dl003]

What I've always expected: we would get here, the 250-255 zone
What I've recently got wrong: we would test the 223-226 zone before getting here
Now, regardless of whether my 2nd read is going to play out or not, this has always been the potential reversal zone for the 3rd leg down to 170-180. The playbook has always been the same: First spike (194-227) - small consolidation ( 227-206) - 2nd spike (206-247) - big consolidation (247-226) - final spike (226-250+), then hard drop.

So be careful here. If you don't want to sell calls because you suspect there'd be more upsides here, that's fine. I did say that if 247 was retested and the 4h bearish divergence was fully in play, I'd exit all my longs. It's here and it's now.

 

[Jim Holder]

I did say that if 247 was retested and the 4h bearish divergence was fully in play, I'd exit all my longs. It's here and it's now.

Thank you. Just to be sure, are you saying you sold your longs and are now net short?

 

[dl003]

Might be beneficial to go back to 2 weeks ago. It may seem like a super bullish day today, but I'd seen it coming. Just wasn't reading the chop exactly right.

See my post about "overbought." Without considering other factors such as whether it is the first time it's entered overbought since the last major low, you might as well ignore "overbought" and "oversold." Relying on these readings in a vacuum will do more harms than goods.

All I see it a break of today's high at 247. I don't know if it'll get to 260. I only know it will break 247. I don't know how deep the pullback will be.

Thank you. Just to be sure, are you saying you sold your longs and are now net short?

Yes, I'm net long on puts, net short on calls and long no shares on margin.