Wiki Selling TSLA Options - Be the House

[Jim Holder]

Everyone relax. I've started my Colonoscopy prep. I have to be at the hospital at 8:30 tomorrow. Cheeks up at 9:15am (MST). Everyone who has been on TMC long enough knows this means SP
Trade wisely tomorrow.

Couple that with a vacation by @dl003 and we’ll really be going places

Enjoy the Jackson Cocktail (propofol), always a blast.

 

[Zaddy Daddy]

We should have been doing long on LULU.

Who would of thought.....506 today....

I did sell ITM 460P last week and gained couple hundreds. Could have couple that with a debit call spread based on the credits for a free shot on the upside.
But that's just plain greed and adding more risk.

I think Tesla today is just following big Tech and people are de-risking prior to big Data. Have faith and we shall ride tomorrow - hopefully up

I'm gonna guess LULU is growing earnings, unlike Tesla, who is currently shrinking earnings.

I'm fascinated people think a company should be at or near ATH when its going through a year of earnings decreases.

Some are modeling even slightly lower ASP and earnings in Q4 vs Q3. We are talking ~ $0.6 EPS in Q4. I think it will be higher because of Megapacks, but still... that's $2.4 EPS annualized. After Q4, Tesla will have a TTM PE ratio between 80 and 100 at $240 share price. That's.... high.

I'm not saying it's going down, but hard to see it moving up big time with those financials.

But at some point it will go up, question is when will market be confident enough in earnings growth say 6 months ahead of time? I think by end of 2024, Energy and Cybertruck could be providing $0.5 - $0.75 in EPS quarterly. When market *expects* Tesla to be generating $1.25 to $1.5 in EPS quarterly, I think we'll see $350 - $400 share price. Maybe the expectation will be realized mid 2024? Earlier is possible, but I just don't see it no or likely even after Q4 earnings report.

 

[BornToFly]

I'm gonna guess LULU is growing earnings, unlike Tesla, who is currently shrinking earnings.

I'm fascinated people think a company should be at or near ATH when its going through a year of earnings decreases.

Some are modeling even slightly lower ASP and earnings in Q4 vs Q3. We are talking ~ $0.6 EPS in Q4. I think it will be higher because of Megapacks, but still... that's $2.4 EPS annualized. After Q4, Tesla will have a TTM PE ratio between 80 and 100 at $240 share price. That's.... high.

I'm not saying it's going down, but hard to see it moving up big time with those financials.

But at some point it will go up, question is when will market be confident enough in earnings growth say 6 months ahead of time? I think by end of 2024, Energy and Cybertruck could be providing $0.5 - $0.75 in EPS quarterly. When market *expects* Tesla to be generating $1.25 to $1.5 in EPS quarterly, I think we'll see $350 - $400 share price. Maybe the expectation will be realized mid 2024? Earlier is possible, but I just don't see it no or likely even after Q4 earnings report.

Yeah, on X today I saw someone, who has been accurate in the past, calculate a lower EPS in Q4. Pretty soon I may just sell Jan 2025 350CC on 1/3 of my shares for solid income. Then roll up and out if necessary, or have a nice return if the SP stays flat another year.

Edit: I might wait a few more weeks until P&D to do this. Definitely before ER.

 

[Cherry Wine]

Everyone relax. I've started my Colonoscopy prep. I have to be at the hospital at 8:30 tomorrow. Cheeks up at 9:15am (MST). Everyone who has been on TMC long enough knows this means SP
Trade wisely tomorrow.

Holy *sugar* (no pun intended), I'm glad I double down on calls today.

 

[Jim Holder]

New update from @dl003. Read it here:

In sum:

Anticipate a steep correction before this run is over, even if we won't know if this is the start of a new bull market or a dead cat bounce.

The setup is going to be fairly simple:

1) If TSLA breakouts from within the wedge, then expect at least 2 legs up, with a pullback in between.

2) Watch where the 2nd leg ends and how deeply it pulls back.

3) If it pulls back deeper than and trades below the 0.618 retracement level, you should get out of your long.

4) As long as it holds above that level, you can expect a retest and eventual breakout from the high of wave 3. Take your profit at or above that level.

5) If it pulls back deeper than the 0.618 level and morphs into a full blown crash, then the current consolidation can be labeled wave X instead of wave B.

 

[Bunky]

Thanks for sharing. Is the likelihood of a breakout to the upside higher? Or these are just the upside scenarios?

 

[Jim Holder]

Thanks for sharing. Is the likelihood of a breakout to the upside higher? Or these are just the upside scenarios?

He didn’t explicitly say, but reading between the lines it sounds like since TSLA held and closed above $238 it shifted toward a run being possible now, macro permitting.

 

[Jim Holder]

 

[intelligator]

Here's the moves that occurred yesterday. Slight increase at c250 (highest call OI) after Friday's apparent roll of a huge block to that same strike. Smaller relative to but significant daily moves at c245, c242.5, p225 where each increased OI ~ 7-8k. Call OI overlap down to 227.5 (max-pain) seems heavier than put overlap to 252.5, meanwhile overall put to call is 1.07 ... I didn't sell puts yesterday, price didn't come to me, will give it another go today.

 

[Jim Holder]

CPI came in cool yet TSLA soft, dropping from almost $241 to $238.

 

[Nocturnal]

CPI came in cool yet TSLA soft, dropping from almost $241 to $238.

It's been such a dog lately.

 

[thenewguy1979]

Gas went down.

 

[tivoboy]

CPI came in cool yet TSLA soft, dropping from almost $241 to $238.

There has been significant negative positioning (call selling and puts buying, more puts than calls) building overall in the past week, for Dec - Feb. I’m not sure yet if its pre-planning for tax loss selling (IF that is still occurring based on this years market) or a bit of rolling/churning out of large cap growth for some alpha elsewhere. Overall, i‘m positioning for a decent market pullback between now and Feb 23, ‘24. High beta will churn more than anything.

 

[Jim Holder]

There has been significant negative positioning (call selling and puts buying, more puts than calls) building overall in the past week, for Dec - Feb. I’m not sure yet if its pre-planning for tax loss selling (IF that is still occurring based on this years market) or a bit of rolling/churning out of large cap growth for some alpha elsewhere. Overall, I‘m positioning for a decent market pullback between now and Feb 23, ‘24. High beta will churn more than anything.

Makes sense. It's a shame premium is low for selling CC's at current IV. Would be nice to see a run so we can position for the drop. Question is will TSLA see anything higher than $240-245 anytime soon so we can get better premium for selling CC's, or are we in sell-any-rip mode currently on TSLA?

 

[tivoboy]

Makes sense. It's a shame premium is low for selling CC's at current IV. Would be nice to see a run so we can position for the drop. Question is will TSLA see anything higher than $240-245 anytime soon so we can get better premium for selling CC's, or are we in sell-any-rip mode currently on TSLA?

That is an excellent way to see short to medium term directional expectations..it’s either solidly FLAT, or DOWN.

 

[Max Plaid]

I'd actually argue that inflation came in ever so slightly warmer than expected, Core MoM higher than forecast, but in-libe with consensus, MoM Inflation in-line with forecast, but higher than concensus

Regardless, it's a pretty neutral reading and doesn't account for the TSLA drop, NVDA and AAPL took a similar hit

Hard to see any catalysts to the upside until P&D, so I'm likley to go fairly aggressive on calls into the year-end. I have 100x Jan 19 +c300's that I want to milk and still looking to offload the 60x Dec 2025 +c200's before Elon starts dumping stock to support his other venture... which I'm sure he will, just a question of when - early Q2 is what I'm reading... of course if P&D comes in good, or >500k and margins improve then we might get some traction, but then there's 2024 guidance to consider and although Tesla already said ~50% growth was off the table, so in theory priced-in, you can be sure the stock will dump when that message gets re-iterated on the Q4ER

In play for this week: 40x -p240 @$5.1 & 60x -c240 @$5.2, still looking to sell -c260's ifwe get a pop, butlooking more likely we'll wander around 235 - 240

FOMC tomorrow, expect zero rate changes and a hawkish JPow -> more talk of tightening than the converse I feel, no early Xmas presents from the FED

 

[intelligator]

@Jim Holder , @tivoboy , thanks for this insight. From an IC view, call and put premiums are about the same, similar delta on the sold legs, per 12/11 closing options chain. When you mentioned call premiums being low, are they typically higher than put premiums at same or relative delta when IV is high?

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[Jim Holder]

That is an excellent way to see short to medium term directional expectations. It’s either solidly FLAT, or DOWN.

Then looks like we take what we can get around here.

Perhaps:
STO -C280 3/15/24, 0.31 delta (around $10.00)
BTO +P220 3/15/24, 0.31 delta (around $12.60)

Does this make sense or wait until next week to see which way the wedge resolves?

 

[Jim Holder]

QTA levels for today

12/15

12/22

 

[Jim Holder]

Big seller around $235

If TSLA loses the 50-day...

I hope it's a bear trap and we see 245-250 so we can sell some CC's.