Wiki Selling TSLA Options - Be the House

[BornToFly]

I don't understand what this means .... options (buying) is leveraging. As with any leverage adverse SP movement will make the matters worse. Then there is the while time value thing ....

Well, to make money with shares, you have to time the buying or selling just right. You say you will sell if it drops below 180.... It goes to 179.95, you sell, and watch the SP go back to 180.5, so you buy for a small loss. Then you sell again at 180, and watch it reverse and go to 185. Now you just lost $5.50. With options you decide you want to make 0.5 on a CC in a week, you sell the contract, and pocket the money.

Edit - Things get complicated when we get greedy, sell for strikes we aren't comfortable selling at, or worse yet, start using spreads for leverage and then get smoked.

 

[adiggs]

But I think I'm done with expensive LEAPS, they're too stressy when they fall in price, underwater very fast...

I'm licking my lips, just getting started. Meant to start buying leaps today (meant to start at 200, but .. life), and then I missed the end of the market today while doing other stuff. You can tell I'm not exactly chained to the market while its open

Anyway I plan to be buying an initial round of leaps on Monday. Thinking Jun 26 300s, maybe 250s. I'll be doing some figuring over the weekend about position size, but first guess is I'll figure out how much cash goes into this and put 1/3rd in on Monday. The idea is to have plans for 3 chunks, and the ability to do a 4th chunk as well by taking it out of csp money if the share price really craters.

BUT these leaps will be for capital appreciation on the way back up rather than for cc's. I might sell some cc's using them later, but these are for capital appreciation, and the plan will be to have sold off most of them by 250 or so. Income oriented capital appreciation if you will, rather than looking to own these when the share price hits 600 . Take advantage of what I consider to be a huge gift of a low share price, and yes I do consider 180 low in the context of now to early 2026.

 

[thenewguy1979]

I'm licking my lips, just getting started. Meant to start buying leaps today (meant to start at 200, but .. life), and then I missed the end of the market today while doing other stuff. You can tell I'm not exactly chained to the market while its open

Anyway I plan to be buying an initial round of leaps on Monday. Thinking Jun 26 300s, maybe 250s. I'll be doing some figuring over the weekend about position size, but first guess is I'll figure out how much cash goes into this and put 1/3rd in on Monday. The idea is to have plans for 3 chunks, and the ability to do a 4th chunk as well by taking it out of csp money if the share price really craters.

BUT these leaps will be for capital appreciation on the way back up rather than for cc's. I might sell some cc's using them later, but these are for capital appreciation, and the plan will be to have sold off most of them by 250 or so. Income oriented capital appreciation if you will, rather than looking to own these when the share price hits 600 . Take advantage of what I consider to be a huge gift of a low share price, and yes I do consider 180 low in the context of now to early 2026.

Wouldn't LEAP be cheaper if the SP goes lower? Unless there's strong conviction we hit base why not let the downtrend play out a little longer.

 

[EVNow]

Well, to make money with shares, you have to time the buying or selling just right. You say you will sell if it drops below 180.... It goes to 179.95, you sell, and watch the SP go back to 180.5, so you buy for a small loss. Then you sell again at 180, and watch it reverse and go to 185. Now you just lost $5.50. With options you decide you want to make 0.5 on a CC in a week, you sell the contract, and pocket the money.

Edit - Things get complicated when we get greedy, sell for strikes we aren't comfortable selling at, or worse yet, start using spreads for leverage and then get smoked.

I see ... you are basically saying selling options is easier than shorting stocks ?

Yes - if the options don't go ITM, they are way better (for good sleep). Shorting is basically like selling ATM calls.

 

[mongo]

Shorting is basically like selling ATM calls.

Only if you sell calls for zero premium...

Shorting generates equal liability and credit to start.
Selling a call generates a credit larger than the inital liability. (premium + strike > strike).

Shorting and naked calls both create the possibility of infinite loss but you can't wind up with reduced value stock afterward.

Buy-write or selling calls agsinst held shares both generate $ now, but one might end up with reduced value stock after expiry and thus a net loss on the position. If the stock goes up beyond the strike, the only loss is opportunity cost.

 

[adiggs]

Wouldn't LEAP be cheaper if the SP goes lower? Unless there's strong conviction we hit base why not let the downtrend play out a little longer.

Good question.

I thought we were going lower the last time we touched 210 so I kept waiting. Then we were back at 250 and I was kicking myself for not doing something.


The idea is that I don't KNOW that we're goign lower. Only that I believe we are, and frankly hope, that we are. So layer in my position. I'll get some right now in case we don't go any lower. I'll get a lot on a next leg down - maybe 150 if we see that?

Then I'll get some more if there's even another leg lower - say 120?

If we saw 100 then I'd go couch diving (I don't own a couch) to see if I could find any change. Seriously I would turn most of my csp money into leaps and probably be my highest % TSLA ever. Keep 1 or 2 years in cash for living expenses.


Similarly when we start going back up I won't wait before I start selling. I'll probably sell some of these around 200, but not a bunch. Biggish sale at 250? Most all sold by 300. I would keep some to maintain significant exposure to significant upside.


Not-advice.

This is one way in which I make use of my bigger picture view of Tesla and TSLA.

 

[Hiline]

Damn some people are so bearish, talking about becoming the nurse from Dumb Money and even brought in sp from GJ. Tesla has always traded at a premium even when they were about to go bankrupt. It's a "lets wait to see if Elon pulls a rabbit out of a hat" kind of stock and there are plenty of people willing to wait for that moment. Becoming profitable was that first rabbit hat pull. Now people are waiting for FSD or optimus so it will trade at a premium as the upside is too huge to miss out if it happens.

I laugh every time people react like this.

The correct time to sell a stock is when it is going up, and the correct time to buy a stock is when it is going down. Yet the majority of traders do the exact opposite. When the stock is trading at a reasonable P/E of 42 like this, you know its valuation is quite healthy. P/E of 70 without any immediate clear strong growth engine was in bubble territory. This is the first time in the last 9 months that I've felt confident about adding to my holdings. As for when the rest of the market is going to realize the stock is oversold, I'm going to defer to the expert chartists in this thread.

 

[Max Plaid]

I'm licking my lips, just getting started. Meant to start buying leaps today (meant to start at 200, but .. life), and then I missed the end of the market today while doing other stuff. You can tell I'm not exactly chained to the market while its open

Anyway I plan to be buying an initial round of leaps on Monday. Thinking Jun 26 300s, maybe 250s. I'll be doing some figuring over the weekend about position size, but first guess is I'll figure out how much cash goes into this and put 1/3rd in on Monday. The idea is to have plans for 3 chunks, and the ability to do a 4th chunk as well by taking it out of csp money if the share price really craters.

BUT these leaps will be for capital appreciation on the way back up rather than for cc's. I might sell some cc's using them later, but these are for capital appreciation, and the plan will be to have sold off most of them by 250 or so. Income oriented capital appreciation if you will, rather than looking to own these when the share price hits 600 . Take advantage of what I consider to be a huge gift of a low share price, and yes I do consider 180 low in the context of now to early 2026.

Yeah, whatever you do, don't assume SP sideways or flat and sell short term calls against them all - that was my big mistake last year

However, if you have a sell target on 1/3rd of those, then you could conceivably sell calls on 1/3 of the stock at, or above that strike, if it doesn't hit, you made some premium, if it looks to go ITM then you roll it up and out to your next sell target against 1/3 of the LEAPS, then repeat, or not, for the final tranche

If you see what I mean...

Just an idea...

 

[BornToFly]

A month ago when we were at 265 I didn't think we would be talking about 150 again. I ran the stock price calculator and I'm good with margin at SP 120. I'm not ok at 100. I'm also not OK if Fidelity suddenly changes their Margin Requirements, as they have done to put me into trouble in the past. Even buying 120 strike Jan 2025 protective puts on all my shares is very expensive. I might need to start selling shares on the way down at $5 intervals....

 

[Yoona]

everything you need to know about the 2023 Q4 disaster earnings

it's the 2nd-worst P&D to Earnings range, and 4 consecutive red quarters from P&D

one week before earnings

7dte

4dte

earnings day to friday (ie 2 days)

day1

day2

what is day 2 if day 1 is red?

 

[Yoona]

everything you need to know about the 2023 Q4 disaster earnings

it's the 2nd-worst P&D to Earnings range, and 4 consecutive red quarters from P&D
View attachment 1012695

one week before earnings
View attachment 1012697

7dte
View attachment 1012698

4dte
View attachment 1012699

earnings day to friday (ie 2 days)
View attachment 1012701

day1
View attachment 1012702

day2
View attachment 1012703

what is day2 if day 1 is red
View attachment 1012705

what to expect going forward?

62% chance of green 7dte

64% chance of green 14dte

54% chance of green 21dte

54% chance of green 28dte

other useless stats:

my IC has 86-88% chance of surviving earnings week (backtested 51 quarters)

 

[BornToFly]

A month ago when we were at 265 I didn't think we would be talking about 150 again. I ran the stock price calculator and I'm good with margin at SP 120. I'm not ok at 100. I'm also not OK if Fidelity suddenly changes their Margin Requirements, as they have done to put me into trouble in the past. Even buying 120 strike Jan 2025 protective puts on all my shares is very expensive. I might need to start selling shares on the way down at $5 intervals....

The problem with this - Put a sell order at 180. It triggers. Stock goes back up. You say I'm not buying back those few shares back and I'm willing to miss out on the upside to protect against a down turn. No problem.

But the SP keeps going down, so you sell again at 175, and 170. Now the SP goes back up. You buy at 175 and leave the 170 priced shares to absorb more downturn. It goes below 175 again. Do you sell again? In a sense you took a $5 loss already.

This sucks. I need the 180 line to hold. The big worry is that the markets in general are at ATH. So a crash could easily put TSLA under 100. Lets hope FOMC goes well this week.

P.S. - I still have margin concerns because of hundreds of BPSs I still have from 2021 that went ITM in early 2022 and I can't seem to get rid of....

 

[Yoona]

For what you do, you should look at PANW as well, right in your wheelhouse.

that is very interesting, TYVM

 

[EVNow]

Only if you sell calls for zero premium...

Shorting generates equal liability and credit to start.
Selling a call generates a credit larger than the inital liability. (premium + strike > strike).

True.

BTW, if the short call is executed, you have short stock. Happened to me a couple of times (was selling spreads).

 

[DaBooster]

what to expect going forward?
View attachment 1012707

62% chance of green 7dte
View attachment 1012708

64% chance of green 14dte
View attachment 1012709

54% chance of green 21dte
View attachment 1012710

54% chance of green 28dte
View attachment 1012711

other useless stats:

my IC has 86-88% chance of surviving earnings week (backtested 51 quarters)

View attachment 1012712

Thank you for sharing this

 

[StarFoxisDown!]

So I think I saw someone mentioning something about selling CC's on the LEAPS that they own. Did I read that correctly? That you can sell CC's on the LEAPS that you own?

Edit - So I spent some time this morning looking this up and you in fact can. Man do I feel stupid right now. I should have been selling CC's on all my LEAPS months ago

Are there things to keep in mind about selling CC's on your LEAPS? The obvious thing would be selling CC's at a strike prices higher than the corresponding LEAP that I own correct?

 

[juanmedina]

Damn some people are so bearish, talking about becoming the nurse from Dumb Money and even brought in sp from GJ. Tesla has always traded at a premium even when they were about to go bankrupt. It's a "lets wait to see if Elon pulls a rabbit out of a hat" kind of stock and there are plenty of people willing to wait for that moment. Becoming profitable was that first rabbit hat pull. Now people are waiting for FSD or optimus so it will trade at a premium as the upside is too huge to miss out if it happens.

my comment was more about doing something instead of diamond handing stock through anything. Also, about my experience of that crazy run to $1240 that was life changing and euphoric in which retail had a big part with that run. In no way shape or form I am suggesting that Tesla will go bankrupt or that I has a company of the same caliber as GME.

Yes I am bearish, for instance what is Tesla going to about the Model 3 LR which currently sells for $46k but meanwhile you can get a Model Y LR for $38k of inventory with the incentive? I am actually glad that Tesla didn't give out any guidance because maybe they will decide not to keep lowering prices. Like others I am also worried about the macro, the market is at ATH.

I was really worried about ER and also nervous about my work situation and I took action. For the year I am down 5% and so far it looks like the right play. My problem now is that I don't know what to do with my money and I would like to buy back but I really need to feel that Tesla the stock is on the right path. I am really curious about @tivoboy trades during this time.

So I think I saw someone mentioning something about selling CC's on the LEAPS that they own. Did I read that correctly? That you can sell CC's on the LEAPS that you own?

And if so, is the process the same? As in, does your broker look at the amount of LEAPS you own, same as if you had actual shares, to know how many CC's you can sell on those LEAPS?

And is there unique things to consider when selling CC's on LEAPS?

Thanks guys.

It is called the poor man's covered call:

Poor Man's Covered Call - What is it?

 

[Yoona]

need help from mathematicians/statistics geniuses pls

i have a dataset

and i want to exclude "special cases" (that is outside of a majority range) outlined in the boxes

so what i am left with is +6.59 to -6.52

what is that mathematical formula called? percentile? median? rank? weighted avg? distribution? variance? etc

TIA!!!!!

 

[adiggs]

So I think I saw someone mentioning something about selling CC's on the LEAPS that they own. Did I read that correctly? That you can sell CC's on the LEAPS that you own?

Edit - So I spent some time this morning looking this up and you in fact can. Man do I feel stupid right now. I should have been selling CC's on all my LEAPS months ago

Are there things to keep in mind about selling CC's on your LEAPS? The obvious thing would be selling CC's at a strike prices higher than the corresponding LEAP that I own correct?

These are technically diagonal spreads, but the best way to get a variety of sources of info is to search for PMCC or Poor Man Covered Call. The general idea is that an ITM long call with a higher DTE replaces 100 shares in a covered call. There are elements about it that can be very different from a cc; these can also be structured so that they behave a lot like a cc.

The specific dynamic that is not shared with a share backed cc is that the short call can go ITM and then keep going until the delta on the short call is higher than the delta on the long call. At that point you will start losing money, net, as the share price keeps going up (unrealized as long as you own everything). That doesn't happen with share backed cc - the shares delta is always higher, though the option price can be moving faster due to changes in IV.

That is a particularly bloodless description of a terrifying situation .

 

[The Accountant]

My problem now is that I don't know what to do with my money

While you're waiting to decide you can park your money in a Fidelity Mutual Fund earning 5.26% annually (FIGXX)
You don't need a Fidelity Account to invest. I park my money there with my Merrill Lynch account.
You need the overnight to clear a transaction so it's not liquid immediately but within 16 hours or so.