Wiki Selling TSLA Options - Be the House

[juanmedina]

Piper Sander lowered its price target on TSLA from $295 to $225.

Wow that is a bad one. He has been bullish for a while.

 

[Jim Holder]

I would be looking to sell CCs on any strength.

Me too. I also plan to sell CCs on any pops. My main concern is some short puts I have (15x -P280 January 2025 and 10x -P300 June 2025) that I already rolled out and down once and they’ll need dealing with if we break $170. I regret closing the short call side of the straddle a couple weeks ago at the low $200’s and for not putting them back on. Personally I handled this dump down lousily despite promising myself to be smart and prepared to maximize the next dump. At least there’s tomorrow and the next day and the one after etc to work on our skills and perfect our moves.

 

[intelligator]

Me too. I also plan to sell CCs on any pops. My main concern is some short puts I have (15x -P280 January 2025 and 10x -P300 June 2025) that I already rolled out and down once and they’ll need dealing with if we break $170. I regret closing the short call side of the straddle a couple weeks ago at the low $200’s and for not putting them back on. Personally I handled this dump down lousily despite promising myself to be smart and prepared to maximize the next dump. At least there’s tomorrow and the next day and the one after etc to work on our skills and perfect our moves.

I have these too, 6x Jan 25 -p280 CSP. Tying up quite a bit of cash. Mine were rolled there last year this time for the same reason. If they are assigned, I get 600 shares at 280. What happens to the value they are underwater by, I'm assuming I have to sell some of the shares? Should I just aim to keep rolling as long as I can?

While we try to duck and hide, look at today's price action on smci , up $107 from Friday's close, insane ! TSLA ??????

 

[vikings123]

Me too. I also plan to sell CCs on any pops. My main concern is some short puts I have (15x -P280 January 2025 and 10x -P300 June 2025) that I already rolled out and down once and they’ll need dealing with if we break $170. I regret closing the short call side of the straddle a couple weeks ago at the low $200’s and for not putting them back on. Personally I handled this dump down lousily despite promising myself to be smart and prepared to maximize the next dump. At least there’s tomorrow and the next day and the one after etc to work on our skills and perfect our moves.

I’m finding it difficult to see any positives in the near future but you have time on your side so hopefully it bounces back.

After I saw what TSLA was doing even pre ER in this bull market I decided to wait it out. No CSP just day trading levels using CCs and buying puts. Can you imagine the bloodbath if NASDAQ actually has a 4-5% red day? What happens when the eventual market correction comes? I’d say it’s not going to be pretty and could even be a flash crash not giving us time to make moves.

While I know our time will come I also think it’s prudent not to go and catch falling knives. I think we should be extra cautious.

I hope I’m wrong and TSLA breaks 200 this week and that’s fine too. I’m going to be very patient unlike last time.

If you want to know what Wall Street thinks of TSLA see this tweet. IMO there is more pain to come in the short term.

https://twitter.com/x/status/1754545627067809850

 

[Jim Holder]

I have these too, 6x Jan 25 -p280 CSP. Tying up quite a bit of cash. Mine were rolled there last year this time for the same reason. If they are assigned, I get 600 shares at 280. What happens to the value they are underwater by, I'm assuming I have to sell some of the shares? Should I just aim to keep rolling as long as I can?

Here's what @Max Plaid suggested when I asked about mine recently (note: I don't fully understand the adding calls part (is it long or short and what strike/DTE etc.) but the rest is pretty clear):

• Personally I'd ride it out, I wouldn't be selling at a loss.

• Keep an eye on the extrinsic not going to zero, then roll out 3 months and straddle with calls. That's what I would do as of this moment in time, but I'm liable to change opinion very fast too. The general rule-of-thumb here is that there needs to be less than $1 extrinsic and close to expiry before you start sweating on early assignment. Doesn't help that IV is pretty low.

• Another way to increase the extrinsic is to roll down, so then add some calls to make a straddle and reposition at $260 strike or something like that. Probably roll out and reduce the strike is safest.

• Worst case you can always sell the assigned shares and sell a new put further away.

 

[intelligator]

Here's what @Max Plaid suggested when I asked about mine recently (note: I don't fully understand the adding calls part (is it long or short and what strike/DTE etc.) but the rest is pretty clear):

• Personally I'd ride it out, I wouldn't be selling at a loss.

• Keep an eye on the extrinsic not going to zero, then roll out 3 months and straddle with calls. That's what I would do as of this moment in time, but I'm liable to change opinion very fast too. The general rule-of-thumb here is that there needs to be less than $1 extrinsic and close to expiry before you start sweating on early assignment. Doesn't help that IV is pretty low.

• Another way to increase the extrinsic is to roll down, so then add some calls to make a straddle and reposition at $260 strike or something like that. Probably roll out and reduce the strike is safest.

• Worst case you can always sell the assigned shares and sell a new put further away.

Maybe a short straddle by selling the same number of calls at the rolled down and out -p260 strike?

EDIT: I had the wrong expiration for the sold call ... this reduces the move to $240 , the rolled down and out put gets added extrinsic ... have to understand the Short Straddle, why that would be useful , what the added risk is.

--> Maybe not such a good thought, short straddle, unlimited loss each direction. Hence Max Plaid suggesting might be best to roll down and out instead.

https://optionstrat.com/build/custom/TSLA/.TSLA250117P280x6,.TSLA250321P260x-6,.TSLA250321C260x-6

 

[Jim Holder]

Maybe a short straddle by selling the same number of calls at the rolled down and out -p260 strike?

https://optionstrat.com/build/custom/TSLA/.TSLA250117P280x6,.TSLA250321P260x-6,.TSLA250117C260x-6

I don’t know. I’m sure @Max Plaid will clarify when he comes back online.

I also have a bunch of bought LEAP calls that are red and getting redder. I thought I was brilliant legging into them on the way down

I'm an idiot since the cash that's tied up in my bought LEAP calls would have provided a cushion for the short puts that are weighing on everything and can bring a maintenance call below $170.

All my LEAP calls need around $235 by April-June to escape, not terribly unlikely. Anything above $235 will be bonus gains.

Okay markets, I'm humbled!

 

[⚡️ELECTROMAN⚡️]

Wow that is a bad one. He has been bullish for a while.

That's still bullish.

 

[elasalle]

I don’t know. I’m sure @Max Plaid will clarify when he comes back online.

I also have a bunch of bought LEAP calls that are red and getting redder. I thought I was brilliant legging into them on the way down

Aside from the top two positions (scalps) this is my current bag of snakes (open to ideas to manage them and/if to add anything alongside):

View attachment 1015734

I'm an idiot since the cash that's tied up in the bought calls would have provided a cushion for the short puts that are weighing on everything and can bring a maintenance call below $170.

All the LEAP calls need around $235 by April-June to escape, not terribly unlikely. Anything above $235 will be bonus gains.

Okay markets, I'm humbled!

Close and buy Jun 26 calls ( or something further out) … trade money for time
… stay in the fight

 

[Yoona]

below is my last TSLA trade for now until R/R improves; prems too low compared to risk (ie sudden reverse or more collapse)

i am going NVDA (not going to post trades here as this is a TSLA thread on a TSLA forum; still figuring out where)

 

[traxila]

below is my last TSLA trade for now until R/R improves; prems too low compared to risk (ie sudden reverse or more collapse)

i am going NVDA (not going to post trades here as this is a TSLA thread on a TSLA forum; still figuring out where)

View attachment 1015747

If the returns on selling the options are too low to take the risk, does this not mean that one should consider buying options as they are cheap?

 

[StarFoxisDown!]

TSLA’s gotten so bad and stale that even the option traders are heading for the door .

Joking aside, the premiums being so low combined with the non stop one sided direction of the shares has limited much of the choices at this point. I’m positioned more to take advantage of the impeding dip to 146. But this time even if I do get that dip, I don’t see a V shape recovery like last time. Just a long drawn out period of - very slow grind throughout 2024 with quick drops that take out weeks/months of a grind higher and thus premiums are gonna continue to underwhelm.

Starting to wonder just how much Fed rate cuts will support the stock. Tesla’s gotta actually start executing better and making progress on a number of things for get wall st off it’s back and give it any sort of premium valuation at this point. They’ve lost all good will/faith with Wall st

Those things will come but doubting it’ll be 2024 when they do

 

[SebastienBonny]

TSLA’s gotten so bad and stale that even the option traders are heading for the door .

Joking aside, the premiums being so low combined with the non stop one sided direction of the shares has limited much of the choices at this point. I’m positioned more to take advantage of the impeding dip to 146. But this time even if I do get that dip, I don’t see a V shape recovery like last time. Just a long drawn out period of - very slow grind throughout 2024 with quick drops that take out weeks/months of a grind higher and thus premiums are gonna continue to underwhelm.

Starting to wonder just how much Fed rate cuts will support the stock. Tesla’s gotta actually start executing better and making progress on a number of things for get wall st off it’s back and give it any sort of premium valuation at this point. They’ve lost all good will/faith with Wall st

Those things will come but doubting it’ll be 2024 when they do

Premiums are way lower indeed, but that's not strange when trading at a lower stock price and considering they were very high running into earnings.

 

[SebastienBonny]

Agree that income is the point - at least it is for me and why I'm doing this.

However the first priority of income is to avoid permanent loss of capital. If you've got a position you're rolling, then you're rolling it because it is a loss. In this instance profit is turning the loss into a small enough loss to just take it and be rid of the position, or holding on and being patient enough to turn it into a gain.

There are times when far enough ITM that even a monthly roll won't really generate any income - you need something more like 3, 6, 12, even all the way out to the max date rolls.


I'm with you on selling calls that are under cost base - there will (pretty much) always be a roll when approaching or just slightly ITM where well chosen calls can be rolled up and out to get to the cost basis. I say pretty much always because we've seen some really extreme instances recently where that didn't really happen.

You're right rolling a bit further could give some extra premium and possibilities to roll back in should we get a reversal.
In this case rolling to april may be worth it for the 220 -P.
Time is on our side and, as we believe in the future of Tesla, we know stock will go up again somewhere.

I also see we could get to 200 in the near term, that would also give me the possibility to roll it one month for premium.
On the other hand, if I get assigned, I could sell a monthly 200 CC for an ok premium as well.
So I think for the time being, I'll just let it be and see what happens to the stock this and next week.

I'm also waiting for 03/29 contracts to pop up. I think that will be at the end of the week.

 

[Max Plaid]

I don’t know. I’m sure @Max Plaid will clarify when he comes back online.

I also have a bunch of bought LEAP calls that are red and getting redder. I thought I was brilliant legging into them on the way down

Aside from the top two positions (scalps) this is my current bag of snakes (open to ideas to manage them and/if to add anything alongside):

View attachment 1015734

I'm an idiot since the cash that's tied up in the bought calls would have provided a cushion for the short puts that are weighing on everything and can bring a maintenance call below $170.

All the LEAP calls need around $235 by April-June to escape, not terribly unlikely. Anything above $235 will be bonus gains.

Okay markets, I'm humbled!

Benefit of a short straddle is that you can use the premium from some calls to reduce the strike for the puts, making the likelihood of them going OTM higher, increasing the extrinsic and making further rolling easier

Example: I currently hold Sep 2024 -p270's, these are underwritten by June 2026 +p270's, so in principle they're "safe", I can just roll them at the same strike for a couple of year and they'll cancel-out, the risk comes with the early assignment, so I need to keep an eye on the extrinsic, which right now is around $1

I also watch the OI (1300) and the volume (16 yesterday), there's not a lot of action at this strike at this moment, which I take as a good sign

Possibilities: you can get really creative with options, and any of the below can be combined, I'm not recommending any, just ideas

- do nothing and if assigned re-write: although unlikely, there us a risk is that all 65x get assigned at once, which I cannot cover in cash, would create a margin-call and all the hassle that entails. In theory I have 5 days to resolve that with my bank, but I don't want to put it to the test much

- close out the lot: buy the shorts, sell the longs: not in favour of this as the -p270's gained more value than the +p270's, better to do this when the SP is higher

- roll them out: even taking them +12 months only yields +$7 or a strike improvement to 260, not very interesting

- roll and straddle: now we can get creative, the short puts are worth ~$90, Jan 2025 -250's works, that's to too bad and there's $5 extrinsic in the puts

- roll and inverse strangle: for a more bearish outlook, if you have the free contracts, write some aggressive calls to bring the put strike down Sep 2024 -p250/-c200 -> risky to have -c200's compared to -p270's? Right now I'm not so sure, the positive is that if those calls go ITM, the puts lose value big time

- roll up and out, reduce exposure: yes, sounds strange, but I have 65x -p270, that's an exposure of $1.75million, premium value $580k, these could be rolled to 26x Jan 2025 -p400 @$220, same premium near enough, but total exposure of just over $1million, so less cash/margin requirement

- sell aggressive weekly -cATM: given I have a ton of long calls, I'm OK to write -cATM, if the SP flies then I can throw them up and out. I did this yesterday selling 100x -c175's and used the premium to roll down the 2/16 -p190's to -p175's, you can use that same premium to a) buy back the short puts, b) roll down the lot weekly, c) buy back and resell some at a way lower strike

Right now I'm personally preferring the aggressive weekly -cATM's, but first I use that to deal with my weekly puts, again this works for me given my portfolio composition, but may not be the same for others

 

[SpeedyEddy]

Getting the feeling that today's price action is not showing the power needed to go calling it a bottom in any way, yet.
Thinking about another round of -C selling, maybe a bit less aggressive, -205 or so, for 1-2 months out.

STO yesterday:
TSLA NASDAQ.NMS Feb16'24 195 CALL
TSLA NASDAQ.NMS Feb23'24 195 CALL
TSLA NASDAQ.NMS Mar01'24 200 CALL
TSLA NASDAQ.NMS Mar08'24 205 CALL
TSLA NASDAQ.NMS Mar15'24 208.33 CALL
TSLA NASDAQ.NMS Mar22'24 210 CALL

 

[SpeedyEddy]

Bullish trend reversal hammer

https://optionstradingiq.com/bullish-hammer/

View attachment 1015680

As of now, we really need such a thing on the weekly, so let it drop and rebound (165-ish) to prevent that the 140-scenario takes over based on overall weakness

 

[SpeedyEddy]

Did you all see the Palantir earnings call, yesterday? I hope Elon did and learns from it how to be confident on the business and give guidance,
What a show. (happy to have doubled PLTR holdings on the dip yesterday)

 

[SpeedyEddy]

After I saw what TSLA was doing even pre ER in this bull market I decided to wait it out. No CSP just day trading levels using CCs and buying puts. Can you imagine the bloodbath if NASDAQ actually has a 4-5% red day? What happens when the eventual market correction comes? I’d say it’s not going to be pretty and could even be a flash crash not giving us time to make moves.

I do not know if there will be a correction, but if, this scenario is my worst nightmare as well. (geopolitics being the nest of the next black swan most likely while Chinese Real-estate disaster does not seem to hurt anyone (which I doubt, but XI seems to have deep pockets). I think the distance between top companies and the rest in terms of profitability is growing (winner takes all) and this is something I heard between the lines yesterday at PLTR earnings call as well. Europe is going to be broke and does not want to invest heavily in market-competitioning, so America will take over. China is broke, Russia is broke, so I guess long term it will be India and the US, which are not competitors really. So only geopolitics can hurt the top of the American Stockmarket. This hopefully will keep $TSLA afloat, before the next GM improvement will do so. (Energy, Teslabot, next gen EV)
Hope is not a viable investment strategy, I know.

 

[SebastienBonny]

Did you all see the Palantir earnings call, yesterday? I hope Elon did and learns from it how to be confident on the business and give guidance,
What a show. (happy to have doubled PLTR holdings on the dip yesterday)

Those days... I started options with Palantir because you could do a lot without a lot of money .
But a lack of experience made me panic when it tanked, while I should've been patient.