Wiki Selling TSLA Options - Be the House

[Jim Holder]

I'm fine. My hedge kept me safe. Things got too bearish and emotional around here so I decided to take some time off from everything. Im not upset that we touched 175 but that we did while SPY made ATHs. I was prepare for this, but not this & SPY 500.

The magnet, if 175 was the bottom, is going to be 196.5. If you get caught off guard by the bounce, rest assured that it will eventually go back to this level before Q1 P&D. Absent price hikes, 209 should bring big sell. With price hikes, 220 then 230 will be on the table but eventually 196.5 will pull it down.

Welcome back!

For those of us with short put LEAPS that might lose extrinsic @SP <$170, do you think we’d see below $170 after $209, or $180-$170 may be it?

 

[Jim Holder]

I'm fine. My hedge kept me safe. Things got too bearish and emotional around here so I decided to take some time off from everything. Im not upset that we touched 175 but that we did while SPY made ATHs. I was prepare for this, but not this & SPY 500.

The magnet, if 175 was the bottom, is going to be 196.5. If you get caught off guard by the bounce, rest assured that it will eventually go back to this level before Q1 P&D. Absent price hikes, 209 should bring big sell. With price hikes, 220 then 230 will be on the table but eventually 196.5 will pull it down.

Are you tilting bullish here and begun buying LEAP calls and selling puts here, if yes, what strikes/DTE?

 

[thenewguy1979]

We mooning premarket…. Hitting 188

 

[dl003]

Welcome back!

For those of us with short put LEAPS that might lose extrinsic @SP <$170, do you think we’d see below $170 after $209, or $180-$170 may be it?

without any substantially negative development, the daily bullish divergence should put us firmly in the bottoming zone. So it may pull back a bit below 196.5 but that should be it.

Consider switching from ITM short puts to ATM ones when we get to 196.5 to harvest theta while the consolidation runs its course.

 

[Jim Holder]

Consider switching from ITM short puts to ATM ones when we get to 196.5 to harvest theta while the consolidation runs its course.

Thanks. I probably don't understand what you mean. Switching -P280 1/2025 to ATM -P190 1/2025 results in a debit of $66 per contract, and pulling them to the present (-P190 2/16) is even more at a $90 dollar debit.

Edit: You probably mean any NEW short puts, not existing ones ITM.

 

[UncaNed]

I’m not deploying any serious $$ till $16x, there is a lot of buyer interest from VWAP, history and currently now in the $160-165 range. I still think we’re going to get into $15x in the next six weeks now (when I previously posted that target it was for Q1’24, now we’re 1/3 through Q1). The $148 TA level is a target, but in my opinion not a destination. Once we get clearly into ~ $165 there will be a LOT of buyers of all stripes and sizes, and I think that will provide stability for time and facts to turn positive.

We HAD a wall built at $180 by market participants, but now that’s pretty much gone and I think the same gang is trying to build ANOTHER wall ~ $160.

I know that’s not what anyone wants to hear, but well there it is.

I was short the 12x 2/24 $205 covered calls @ ~ $5.5, but have bought them back for 95% win at this point, that’s enough for now.

Still thinking we'll see $16x - $15x, @tivoboy ?

 

[UncaNed]

In the last week or two, there was even mention of TSLA at $20 or $50 or something... if there was a macro reversal now with TSLA already this far down...

I'm wondering how much dry LEAP-buying powder I should keep and for how far down...?

 

[dl003]

Thanks. I probably don't understand what you mean. Switching -P280 1/2025 to ATM -P190 1/2025 results in a debit of $66 per contract, and pulling them to the present (-P190 2/16) is even more at a $90 dollar debit.

When you anticipate a bounce running out of steam, exchange delta for theta. You have to pay $90, but if the stock does not have much room to go up or may even go down, that $90 is "dead" anyway. May as well roll it back ATM for $4 weekly time value and slowly shrink your loss via that route. The other route is of course the one you would be deviating from, the quicker delta route. The downside is if you call the top wrong and the stock runs up another $10, $20, you are now in the slow lane looking at other cars passing you in the fast lane.

 

[dl003]

In the last week or two, there was even mention of TSLA at $20 or $50 or something... if there was a macro reversal now with TSLA already this far down...

I'm wondering how much dry LEAP-buying powder I should keep and for how far down...?

There are no macro reversal as far as I can see. Theres a looming pullback but only 4-5% draw down.

 

[Max Plaid]

PM action might be on the rumour of Tesla job-cuts incoming - historically this has pushed the stock down though, so who knows...

https://twitter.com/x/status/1755226364100149467

 

[elasalle]

In the last week or two, there was even mention of TSLA at $20 or $50 or something... if there was a macro reversal now with TSLA already this far down...

I'm wondering how much dry LEAP-buying powder I should keep and for how far down...?

No one really knows ... best approach is to do so in tranches ...
Have a hard time thinking TSLA will go to 50, but it sure could happen ..

Reasons TSLA went down
TSLA
... didn't give guidance ...
... Elon's drug usage regurgitated by MSM (tested negative by NASA ...)

Macro,
While US is at ATH, China not doing so well and 50+% of Tesla is China. But China govt will pump money and stabalize China

Isn't it convinient that as soon as Ford, GM gave up on EVs, the narrative changed to EV demand issue ...

.. Here is just one example of what is happening under the covers (from U tube Limiting factor .. Phase 2 in Q3), 2024 might be transitionary but I think good times ahead.
It's all about batteries and scale and when it will happen ... not if it will happen. cheers!!

 

[Jim Holder]

When you anticipate a bounce running out of steam, exchange delta for theta. You have to pay $90, but if the stock does not have much room to go up or may even go down, that $90 is "dead" anyway. May as well roll it back ATM for $4 weekly time value and slowly shrink your loss via that route. The other route is of course the one you would be deviating from, the quicker delta route. The downside is if you call the top wrong and the stock runs up another $10, $20, you are now in the slow lane looking at other cars passing you in the fast lane.

I hear you. In my case doing this will result in using margin to cover about 30% of the debit and I'd prefer staying margin-free. But maybe when we close over $196.50 I'll just sell a few new ATM short puts to capture some theta while leaving the other position on.

 

[BornToFly]

Well, guess I'm rolling my 190CCs for Friday....

 

[dl003]

I hear you. In my case doing this will result in using margin to cover about 30% of the debit and I'd prefer staying margin-free. But maybe when we close over $196.50 I'll just sell a few new ATM short puts to capture some theta while leaving the other position on.

that'd be very aggressive and not at all what those ATM puts are intended for.

 

[Jim Holder]

PA in pre market has already extended above the 1.0

Important thing to note, structure point 1 at the target line could push us down back down the low volume to $185, high risk.

If momentum is on our side expect us to push back up to structure 2. There is low volume on the 1h to get up to that point so we could continue to fly up there quickly with continued momentum.

Watch stochastic on the open, if we maintain over >60 we have a shot.

Reminder that the resistance at the next structure between $191-194 is significantly more than the one at $188-190; if we breach this one it would be a change of character back to the upside.

Credit: Paolodamus

 

[SebastienBonny]

Well, guess I'm rolling my 190CCs for Friday....

Only Wednesday and premarket of course, but again you see how quickly things can reverse (if it holds...).

 

[Jim Holder]

that'd be very aggressive and not at all what those ATM puts are intended for.

Ugh, I guess I have more to learn. Now I’m officially confused.

 

[dl003]

Ugh, I guess I have more to learn. Now I’m officially confused.

Rolling mean you reduce delta and increase theta, done when you expect the stock to have very limited upside.
Keeping the old ITM open while opening new ATM means you add both delta and theta, done when you expect the stock to run up further.

 

[Jim Holder]

Rolling mean you reduce delta and increase theta, done when you expect the stock to have very limited upside.
Keeping the old ITM open while opening new ATM means you add both delta and theta, done when you expect the stock to run up further.

Got it, thanks. So in effect you're saying TSLA is expected to be range-bound ($190-$210) for a while (3-4 weeks?) and therefore trade delta to harvest theta while it does so.

 

[tivoboy]

Still thinking we'll see $16x - $15x, @tivoboy ?

I still think $16x is in the cards, but as I’ve said there is a lot of buying interest in the $16x range, so getting below $160 would be hard…once below though, it’s a quick run into $14x. Again, LOTS of buyer interest so I don’t think we’re going to truly retest the Jan’23 lows.