Wiki Selling TSLA Options - Be the House

[thenewguy1979]

In for 12/29 +267.5C/-272.5C

Cheap bet. Riding the rally next week. Using parts of the week gain. Still net positive if Santa crashed next week.

edit - technically this is still selling right...there's a short leg involved

 

[Jim Holder]

table is for sellers
TSLA Bid Prices for Options Sellers

Got it, thanks

 

[InTheMiddle]

Thought experiment: Suppose instead of wanting to sell CCs that are safe and highly unlikely to be exercised, could one reasonably attempt to optimize selling shares next week by selling CCs for 12/29/23 that have, say, an 80% - 90% chance of being exercised?

Yes, the shares could be simply sold, or puts could be purchased which would provide the contractual assurance of selling, but it’s interesting to contemplate if there is a valid third approach.

Conjecturally, the ideal would be a strike that a) is only slightly below the 12/29/23 close, to ensure execution, and b) has at least some interesting premium above the strike price now or Tuesday, to make it a superior approach vs just a straight sell next week.

Curious if anyone has looked at it from this reverse, likely-to-execute perspective instead of just the usual unlikely-to-execute perspective.

P.S. I’m certain this is not a new, novel, unique concept, but information / analysis of it has been surprisingly challenging to find mention of.

 

[Max Plaid]

Looking to sell two tranches of LEAPs purchased last year in non-taxable accounts (Jan25$300 9/22, and Jan25$160 12/22) as close to cost as possible. Currently, -65% and +50%, need +20% from current to breakeven, then will look to rebuy different strikes on a dip. Will hold slightly positive Jun25$250 (3/23) another 6-9 months unless they spike in the next few months.

A bit the same as me, with the Dec 2025 +c200's that I bought for $122 around SP270 in September, was looking for upside protection, but really not the price level to buy LEAPS!

Getting close to that price now, agrressive Jan +c270's to try and offload them

 

[BornToFly]

Thought experiment: Suppose instead of wanting to sell CCs that are safe and highly unlikely to be exercised, could one reasonably attempt to optimize selling shares next week by selling CCs for 12/29/23 that have, say, an 80% - 90% chance of being exercised?

Yes, the shares could be simply sold, or puts could be purchased which would provide the contractual assurance of selling, but it’s interesting to contemplate if there is a valid third approach.

Conjecturally, the ideal would be a strike that a) is only slightly below the 12/29/23 close, to ensure execution, and b) has at least some interesting premium above the strike price now or Tuesday, to make it a superior approach vs just a straight sell next week.

Curious if anyone has looked at it from this reverse, likely-to-execute perspective instead of just the usual unlikely-to-execute perspective.

P.S. I’m certain this is not a new, novel, unique concept, but information / analysis of it has been surprisingly challenging to find mention of.

Yes, that was the original intent of the thread - ie the "wheel"

 

[BornToFly]

Are you sure about the delay?

I think so. If you hover the mouse over the last part of the line, it tells you the time. At 19 after the hour, the last data point is 16 after the hour.

 

[Yoona]

alas, 3 days in a row struggling at ATH 50% fib, 258.15

4th time this week rejected by ATH 50% fib

 

[Jim Holder]

4th time this week rejected by ATH 50% fib

View attachment 1002089

How many times before we take an elevator down?

 

[DaBooster]

12-29 270/280 BCS 1.15

 

[Cherry Wine]

I'm with you; opened -C270 12/29 @1.38 this morning. Keeping powder dry to open more at 270 and above tomorrow and possibly into early next week. I do think there's a chance that PCE comes in cold tomorrow morning which could give us some more fuel into year end. Estimates are at 0.2% for some reason, but PCE is easily forecasteable once we have CPI/PPI and the better economists are predicting 0.0% and 0.1% based on the data we already have.

Added -C280 12/29 at open today. Still leaving room for more.

 

[Jim Holder]

Some changes in GEX/updated.

So far absGEX providing support

 

[Max Plaid]

Thought experiment: Suppose instead of wanting to sell CCs that are safe and highly unlikely to be exercised, could one reasonably attempt to optimize selling shares next week by selling CCs for 12/29/23 that have, say, an 80% - 90% chance of being exercised?

Yes, the shares could be simply sold, or puts could be purchased which would provide the contractual assurance of selling, but it’s interesting to contemplate if there is a valid third approach.

Conjecturally, the ideal would be a strike that a) is only slightly below the 12/29/23 close, to ensure execution, and b) has at least some interesting premium above the strike price now or Tuesday, to make it a superior approach vs just a straight sell next week.

Curious if anyone has looked at it from this reverse, likely-to-execute perspective instead of just the usual unlikely-to-execute perspective.

P.S. I’m certain this is not a new, novel, unique concept, but information / analysis of it has been surprisingly challenging to find mention of.

This is what we call "The Wheel" - you sell ATM calls until the shares exercise, then ATM puts until they assign, very profitable in a sideways market

 

[Yoona]

How many times before we take an elevator down?

methinks nxt wk ~241.53 bottom

 

[bingoz]

Keep in mind that we'll have a long weekend, and also it's time for tax loss harvesting. TSLA is the only stock that has big event right of the first day of the year. Me personally I am thinking 245-265 range is probably okay for next week with the same low volume/liquidity.

 

[InTheMiddle]

Yes, that was the original intent of the thread - ie the "wheel"

This is what we call "The Wheel" - you sell ATM calls until the shares exercise, then ATM puts until they assign, very profitable in a sideways market

I do miss the old name and the old approach of The Wheel at times. In my mind, The Wheel was more about ambivalence to whether it exercised or not - being able to sell more aggressive calls and puts because one was ok with it executing or not.

In this case, however, the goal is to have high confidence the shares will be sold next week. So, the CC strike price for 12/29/23:
* Under this thread’s current approach would be very high, to collect low risk premium. (Say, <10% chance of exercise by other party or being forced to roll>.)
* Under The Wheel would be a bit lower, ambivalent to whether it exercises next week or not. (Say, 50% chance.)
* Under the thought experiment would be likely even lower. (Say, >90% chance.)

Each time I game theory it, I haven’t seen a high probability of an approach which is materially better than just selling the shares next Friday, or purchasing puts on Tuesday to exercise on Friday, depending on which way one expects next week to go. It’s been both a fun game to try to figure out how to approach this potential 3rd option, and mildly frustrating that it seems so elusive…

 

[Jim Holder]

Check out this non-random mathematical beauty:

The apex of the trend comes to a climax on January 3, 2024, the day after P&D is released(!)

 

[Yoona]

$257.50 seems the magnet for now...

it's the largest dark pool, perhaps today's ceiling

 

[Max Plaid]

In for 12/29 +267.5C/-272.5C

Cheap bet. Riding the rally next week. Using parts of the week gain. Still net positive if Santa crashed next week.

edit - technically this is still selling right...there's a short leg involved

So that's a Bull Ball Spread, which is the inverse of what you'd do with an Iron Condor, where the lower strike would be the short and the higher the long

 

[Jim Holder]

Bookmap update

 

[thenewguy1979]

So that's a Bull Ball Spread, which is the inverse of what you'd do with an Iron Condor, where the lower strike would be the short and the higher the long

View attachment 1002103

hindsight - dumbass move. Sometimes this is what happen when you have too much kibbles...