Wiki Selling TSLA Options - Be the House

[Jim Holder]

This -300C & + 200P has turned from a $2 credit to a $2 debit in 3 days. Meanwhile, the -300C itself has only lost $2 in value.

Nice but not if TSLA went the other way (up). I was speaking then of a plan to STO -C280 in case ER was great, since even if yes it may not pass $260, never mind $270, so $280 was plenty away. Would have also gained on the dump.

Nice! So -C280 06/21/24 @$18.55 here should be a decent risk, BTC in the pits of April/May, correct?
(NFA of course)

Your response was, "I'd do a combination of short FOTM calls + long puts in case ER is spectacular. This is looking like the middle of May this year, when things were starting to look bleak but out of nowhere a barrage of news hit. I'm not saying it's going to shoot up like it did in May, but if we have a spectacular ER, it may change the direction just enough to avoid a crash."

The question was how would the long puts suggested help in case the earnings are spectacular and the SP runs, don’t they need a huge drop to become profitable. And you shared "You'll be wrong either way, but at least an FOTM short call is a lot less stressful than a -280C."

Can you explain your thinking between a long put and this combo, is it just that the combo would cost less?

 

[dl003]

Nice but not if TSLA went the other way (up). I was speaking then of a plan to STO -C280 in case ER was great, since even if yes it may not pass $260, never mind $270, so $280 was plenty away. Would have also gained on the dump.

The question was how would the long puts you suggested help in case the earnings are spectacular and the SP runs, don’t they need a huge drop to become profitable. And you explained: "You'll be wrong either way, but at least an FOTM short call is a lot less stressful than a -280C."

Can you explain the difference between a long put and this combo, is it just that the long put would cost less?


View attachment 1007380

I'm mainly debunking the myth that the stock needs to close lower than the put strike on the exp. date for the put to be profitable. As long as the stock moves according to your projection, a collar (+P & -C) will always be more profitable than a simple -C and a simple +P. Whether you choose to take that profit right at that moment or hold for another day is a different decision. Be nimble.

A collar vs a put: look at them in term of amount at risk and greeks.
A 200P had $12 at risk, with a delta and b theta
A -300C had an unlimited - $12 at risk, with c delta and b theta
A 200/300 collar had $0 at risk upfront but unlimited risk on the back end if the stock skyrockets, with a + c delta and no theta
So if your analysis says that stock cannot stay above 300 by mid June, then that's a plus for the -300C and the collar
If your analysis says that the stock cannot stay above 300 by mid June and is more likely to go down from the spot, then that's another plus for the collar
Choose your strategy based on your analysis.

 

[Jim Holder]

I'm mainly debunking the myth that the stock needs to close lower than the put strike on the exp. date for the put to be profitable. As long as the stock moves according to your projection, a collar (+P & -C) will always be more profitable than a simple -C. Whether you choose to take that profit right at that moment to hold for another day is a different decision. Be nimble.

A collar vs a put: look at them in term of amount at risk and greeks.
A 200P had $12 at risk, with a delta and b theta
A -300C had an unlimited - $12 at risk, with c delta and b theta
A 200/300 collar had $0 at risk upfront but unlimited risk on the back end if the stock skyrockets, with a + c delta and no theta
So if your analysis says that stock cannot stay above 300 by mid June, then that's a plus for the -300C and the collar
If your analysis says that the stock cannot stay above 300 by mid June and is more likely to go down from the spot, then that's another plus for the collar
Choose your strategy based on your analysis.

Excellent, clear and to the point.
Thank you!

 

[SpeedyEddy]

Now all options for the week have been closed (all with a profit) on this side. Not convinced about keeping the uptrend through Thursday (CPI), so maybe wait that out and not gamble, so thinking about early safer option selling for next week as well.
(edit decision made) STO 1/19 -P200 -C265 (edit: -c275 did not fill, but I mainly see downside, looking at H&S on the SPX, will not boat well I guess)

 

[thenewguy1979]

Got some +240C exp 1/12 on the way down to 235.

Going open ICs for next week. Edit - wrong attachment. Look good in term of 1:1 win loss ratio.

 

[dl003]

I expect the stock to end decently higher than right now at some point in the next 2 weeks.

Took a $2 profit on 30% of this positions.
PS: set SL for the rest at B/e.

 

[thenewguy1979]

Took a $2 profit on 30% of this positions.
PS: set SL for the rest at B/e.

I put the same thing under trade station and max loss show infinite - guess that if stock pump to infinite. Too ballsy for this little dog.
Just trade in between and earn kibbles.

 

[thenewguy1979]

NVDA just pump another $13.

Macro Recovering. This week will now depend largely on CPI now....

 

[dl003]

I put the same thing under trade station and max loss show infinite - guess that if stock pump to infinite. Too ballsy for this little dog.
Just trade in between and earn kibbles.

We're talking about my -247.5P position? The loss can't be infinite.

 

[Jim Holder]

Took a $2 profit on 30% of this positions.
PS: set SL for the rest at B/e.

Not trusting this bounce I see

 

[dl003]

Not trusting this bounce I see

Betting against the trend is always risky.

 

[thenewguy1979]

We're talking about my -247.5P position? The loss can't be infinite.

We're talking about my -247.5P position? The loss can't be infinite.

the -300C +200P

edit - reread the post. You did mentioned the unlimited at the call side. Silly dog didn't read them all.

Since you closed out the contract - are you now thinking we go above 300 by mid June?

 

[dl003]

the -300C +200P

edit - reread the post. You did mentioned the unlimited at the call side. Silly dog didn't read them all.

Since you closed out the contract - are you now thinking we go above 300 by mid June?

No I took profit on 30% of my -247.5P position. SL at B/E on the rest.
I never entered the 200/300 collar. Still waiting for that elusive dead cat.

 

[thenewguy1979]

No I took profit on 30% of my -247.5P position. SL at B/E on the rest.
I never entered the 200/300 collar. Still waiting for that elusive dead cat.

Please let us know when you see the Cat. I'll chase it for you

 

[bopdit00]

Please let us know when you see the Cat. I'll chase it for you

$30 drop in 8 trading days. There is no dead cat.

 

[dl003]

The more they try to push it down, the more suspicious I am. Could be a super bear trap. I have a count that is making more sense as the stock keeps drilling. It is bullish. So I will only be super bearish when I say I am. From 260 to 232 in 8 days, consider the bulk of my warning for January substantially played out.

 

[dl003]

$30 drop in 8 trading days. There is no dead cat.

late September we dropped $45 in 8 days and a $35 dead cat followed. Your point?

 

[Yoona]

bounced at DP

 

[Blue horseshoe]

late September we dropped $45 in 8 days and a $35 dead cat followed. Your point?

This is what came to mind when I read that previous post.

Stock: goes down
Some peope: it's not going to stop

Stock: goes up
Some people: its not going to stop

(I may have had these emotional reactions in one or more directions while invested in TSLA )

 

[thenewguy1979]

Come on now. Let get some of what there's smoking over at NVDA over to TSLA please..... almost $50 pump in 2 days.