Wiki Selling TSLA Options - Be the House

[Kat-Stargazer]

Ding Ding we have a winner.

Would not be at all surprised by the stock being held up by MM's only to crater next week before earnings with max FUD out there. Hell there will likely be some sort of negative news between now and earnings, maybe more price cuts in other areas.

Leading into a setup of a sell off before earnings only for Wall St to flip bullish after earnings...even if they're not that great a la Q1/Q2's earnings and corresponding rallies. If this set up does come to fruition, I'll likely close out a number of my CC's and roll the 2025 LEAPS I own to June 2026 on the cheap.

While I do see this being the play by Wall St, there is the possibility that Wall St craters the stock next week only to really pummel it if earnings are weak and we hit all the way down to close the gap at $146.

I'm holding 200 shares dca $224, so I hope this doesn't play out.... but concerned about the possibility.
Also know MM's like to pump after they have everyone looking down.
Not sure what to do, but feel like I should give it another day or two ~ maybe sell 225/230 CC if we get a spike by EOW

 

[Jim Holder]

If this set up does come to fruition, I'll likely close out a number of my CC's and roll the 2025 LEAPS I own to June 2026 on the cheap.

Can you elaborate what you mean by this, are you referring to bought LEAP calls that are red and will become redder on a deeper dump?

 

[Max Plaid]

Stop-hunting commenced…

Some big red candles across several stocks, not just TSLA, AAPL got hit

 

[Yoona]

TSLA is holding on for dear life at the Aug 2023 bottom

next supp is 210.84, 23% fib of Oct 2023 bottom

 

[bopdit00]

TSLA is holding on for dear life at the Aug 2023 bottom

next supp is 210.84, 23% fib of Oct 2023 bottom

View attachment 1009801

It seems to have broken down almost all "bottoms" so far. Insane.

 

[Max Plaid]

That's should help us bounce off the 212.5. Thank Max for again dropping your Wallet.

Seem the forum is lonely today. Just a handful of us talking back and forth

Well don't forget I chickened-out of my 100x 1/26 -p220 and split them into 100x -p205 + 100x -c230 (for +50c credit too!!), which seems like it was a super-smart thing to do right now!

What's really annoying that I started out end of December selling a ton of -c260's, then gradually rolled them down, 250, 240, 220, have stupidly high realised gains as a result, and yet the portfolio is down 10%YTD as my LEAPS, long calls and shares got squished...

Now the trick is to get out of and stop selling the super-aggressive calls just before it reverses...

 

[Jim Holder]

Well don't forget I chickened-out of my 100x 1/26 -p220 and split them into 100x -p205 + 100x -c230 (for +50c credit too!!), which seems like it was a super-smart thing to do right now!

What's really annoying that I started out end of December selling a ton of -c260's, then gradually rolled them down, 250, 240, 220, have stupidly high realised gains as a result, and yet the portfolio is down 10%YTD as my LEAPS, long calls and shares got squished...

Now the trick is to get out of and stop selling the super-aggressive calls just before it reverses...

Crazy times!

Do you hold long calls including LEAP +Cs (and -Ps) through painful troughs if they become red and will get redder or do you dump them regardless and maybe buy back (and re-sell the -P's) later after the bottom seems in?

 

[StarFoxisDown!]

Can you elaborate what you mean by this, are you referring to bought LEAP calls that are red and will become redder on a deeper dump?

I'm referring to a bunch of June and Dec 2025 LEAPS with strikes ranging from 120 to 180 that I bought in Q1/Q2 of 2023. They're very much still in the green though if there were to be a drop to say $146 to close that gap, they would be in the red at that point.

But just a bit of backstory to make sense of my strategy. The TSLA plunge of Q4 2022 really happened at the worst time for me because my now wife and I were wanting to make the switch to home owning since we planned on little guy/girl being in the picture sometime this year. Here in Seattle, you need at least $250-300k for a downpayment + cash for buffer in case of emergency. So I needed to sell down my position since I couldn't take the risk of TSLA dropping even more and staying down for a long period of time and with the stock in the low to mid 100's, I deemed it a better strategy than selling CC's at such a low share price.

So I sold enough stock for future downpayment + cash buffer + enough cash proceeds to buy the equivalent of stock I sold in LEAPS at near ITM strike prices. I'm cashflow positive on a decent basis monthly so I would be able to add back to my cash position meaningfully 2 years or so from that date to exercise the LEAPS. I also work for a pre-IPO company that will either IPO in the next 1-2 years or sell themselves that will also give me a big cash infusion.

So the reason that I would be rolling them from June/Dec 2025 LEAPS to June 2026 or even Dec 2026 (when they become available) is that I want to give the pre-IPO company I work for as much as time as possible to IPO or sell. The LEAPS becoming much cheaper if the share price plummets just means it'll be cheaper for me to roll them and will probably pick up additional June 2026 LEAPS.

The intent of owning and continuing to own these LEAPS is to exercise, not to trade in and out of. They essentially guarantee that I'll at least have X number of shares if the stock goes up and if the stock is lower than the LEAPS, well I'll just be able to buy more outright shares.

I use my CC strategy on with LEAPS on the shares I still own more for trading in and out of for side income.

 

[TexasGator]

Do you hold long calls including LEAP +Cs (and -Ps) through painful troughs if they become red and will get redder or do you dump them regardless and maybe buy back later after the bottom seems in?

everyone strategy is different - typically I do hold LEAP +Cs and have had some eye-watering losses turn into spectacular gains. I will buy/sell some along the way, and try to average down at times like this. some i try to roll further out as has been mentioned before

I have also had some that recovered from a huge loss to just over break even than i got out of (with a big sigh of relief) - that could have been really large gains if held longer (I'm looking at you August 2020 stock split). as with everything options related there is no one right answer

 

[thenewguy1979]

What if this is all a big Bear trap and earning was good?

Definitely got the majority in the corner.

Just really afraid of a big BBQ being set to roast all the Short and Bear.

 

[Max Plaid]

Crazy times!

Do you hold long calls including LEAP +Cs (and -Ps) through painful troughs if they become red and will get redder or do you dump them regardless and maybe buy back (and re-sell the -P's) later after the bottom seems in?

Yes, I tend to hold as they usually recover with the volatility we get. The plan-B is to use them for weeklies and to take enough premium to recuperate the initial cost. Which would be around $1.2 per week from here for the Dec 2025 +c200's

But I am also looking to roll them out to June 2026 for the extra 6 months for an extra $7 cost, seems a good deal to me, if nothing else, gives 25x more weekly writes, but I reality I'm looking to get out of these, I bought them too high and just want to get my money back

 

[Jim Holder]

STO -C300 12/20/24 @$16.50 at this lame pop over $214
Just a few to have on the burner

Since $212 held again I'm not rushing to add more short calls yet, will wait to see if TSLA can muster any sort of relief rally and will look to sell some more then.

 

[StarFoxisDown!]

What if this is all a big Bear trap and earning was good?

Definitely got the majority in the corner.

Just really afraid of a big BBQ being set to roast all the Short and Bear.

Pretty much, with each passing earnings, there are more non-auto variables that could lead to major earnings surprise.

However for this earnings, the only non-auto variable that could cause a decent earnings surprise would be Energy.

Not to speak too much on the business side, but man as Tesla's US fleet size grows, if Tesla would just lower monthly FSD subscription rate to $149/month or $99/month, it could provide meaningful earnings beats going forward. In fact, lower to $149 or $99/month and make a coinciding announcement that outright purchases of FSD will stop after said quarter.

Then think about when they finally open up FSD to China and Europe

If Tesla were to ever actually implement this strategy, I would likely close out all of my CC's and position myself aggressively for the upside, regardless of what the share price did on the day of such announcement.

 

[adiggs]

Last time we were this low I held out for even lower when my share count is below my target. That didn't pan out and I decided then that I wouldn't keep looking for even lower to at least get the shares back up. I WILL keep looking for lower to start buying leaps.

I've added shares today at 214 which brings me back up to my target level - roughly 50/50 shares and cash so I can write comparable numbers of puts and calls when I want to.

Then I went and sold 225 cc's against half of the new shares for next week (a buy-write) at 4.30. I get another $11 / share if they get called away on a nice run, and I get $4 to provide a (very slight) cushion on a continued move down.

 

[adiggs]

Last time we were this low I held out for even lower when my share count is below my target. That didn't pan out and I decided then that I wouldn't keep looking for even lower to at least get the shares back up. I WILL keep looking for lower to start buying leaps.

I've added shares today at 214 which brings me back up to my target level - roughly 50/50 shares and cash so I can write comparable numbers of puts and calls when I want to.

Then I went and sold 225 cc's against half of the new shares for next week (a buy-write) at 4.30. I get another $11 / share if they get called away on a nice run, and I get $4 to provide a (very slight) cushion on a continued move down.

I'll add on - I've got -245p for 2 weeks (rolled these today with ~0 time value) and -230p for next week. I've also got -205p/+175p for next week.

My expectation of the moment is that I'll start buying leaps on a dip down to 200, and keep buying as we go further down. Seems like pushes below 200 just don't last all that long, at least not on the 2+ year time scale of June'26 leaps.

 

[Max Plaid]

Meh, I was chasing to sell an extra 30x 1/26 -c220's today, started at $7.5 order when it popped early, then dropped to $6.5, $6.1, then $5.6 while I went to collect my daughter from babysitting a couple of hours ago, during which time the SP jumped up from the 212's to 214's, bugger!

Still, what's done is done, and it was a lot of fun driving the Plaid in the fairly heavy snowfall we got here today...

I now hold 130x 1/26 -c220's, I'm looking to offload these before earnings, but if I can't the escape plan, should I need one, is a roll to September -c270, but we're a long way from that right now

 

[Yoona]

daytrade is only a little due to chop, but that's ok

 

[Max Plaid]

I'll add on - I've got -245p for 2 weeks (rolled these today with ~0 time value) and -230p for next week. I've also got -205p/+175p for next week.

My expectation of the moment is that I'll start buying leaps on a dip down to 200, and keep buying as we go further down. Seems like pushes below 200 just don't last all that long, at least not on the 2+ year time scale of June'26 leaps.

Feb -p245's? Looks like they still have $1 extrinsic, same as my 1/26 -p240's, which I'm thinking to roll ad-infinitum, just to see what happens, only 20x so not a big deal even if they assign, given the ridiculous premiums taken with calls this year, the shares might end up being "for free"...

Plan B with those puts is September -p270's, which is a bit my default "parking zone" where I've been buying/selling straddles for months now

 

[BornToFly]

I'm hoping for a green Marco tomorrow to help pull TSLA back to 220 area.

 

[adiggs]

Feb -p245's? Looks like they still have $1 extrinsic, same as my 1/26 -p240's, which I'm thinking to roll ad-infinitum, just to see what happens, only 20x so not a big deal even if they assign, given the ridiculous premiums taken with calls this year, the shares might end up being "for free"...

Plan B with those puts is September -p270's, which is a bit my default "parking zone" where I've been buying/selling straddles for months now

THe 245s started off as this Friday expiration . Yeah - no time value left in those. I rolled out to early Feb just to spread out my short put expirations - those have that $1 of time value (give or take).

I like that idea of a parking zone - I've been ITM with puts before and rolled them for 5 months. If I'd done that as a single roll, early on, I'd have gotten some reasonable money out of it. By going week to week I managed to add almost zero incremental credit over those 5 months. Ah well - lesson learned about going DITM. That lesson being to also consider further out expirations. On a short put (or call) I'd hazard a guess at 3 months being a good window, and certainly no more than 6 months.