Wiki Selling TSLA Options - Be the House

[adiggs]

Yikes, my 10x -P250 9/24 @58.00 extrinsic fell from $4.00 to $0.94

May have to roll down and out soon and book a $17k paper loss.

It'll be a real / realized loss. You'll just be entering a new position that puts more cash in your pocket to go forward from there with.

Rolling a losing position realizes the losing position, while creating positive cash flow when you roll for a credit. Just remember that you can maintain positive cash flow and go broke - it happens to companies all the time. It can happen to us as well.

 

[Jim Holder]

It'll be a real / realized loss. You'll just be entering a new position that puts more cash in your pocket to go forward from there with.

Rolling a losing position realizes the losing position, while creating positive cash flow when you roll for a credit. Just remember that you can maintain positive cash flow and go broke - it happens to companies all the time. It can happen to us as well.

Thanks for pointing that out. The paper loss is on paper until I roll it indeed.

 

[adiggs]

Thank you! Is this a moot point for those of us with a broker that automatically makes cost basis adjustments so the loss is built into the shares (if repurchased) and taken against gains in the coming years?

It's not moot. But to the degree that that those losses are rolled into existing positions, then they're not yet realized losses - they are adjustments to cost basis.

So sell a 200 strike put for $10 and take assignment. Instead of a $10 realized cap gain from the put, what goes into your account are shares purchased at $190.

On the wash sale side the idea is that the loss on the sale is added to the cost basis of the replacement purchase. You get to read more about that and talk to an accountant stuffs.


For the rest of the losses - the ones that are realized and don't get moved into a replacement position via wash sale, then you'll have this tax loss situation. Not - advice- I do my taxes with TurboTax and it does a fine job of keeping track of the cap loss being carried forward. Well - as long as I keep track of the file for last year taxes anyway. As its quite valuable - as high as a marginal 50% in my state and high enough cap gains, it is well worth keeping track of.

 

[tivoboy]

Can you define turning it into a carried asset going forward? The loss would only work to offset gains this year and just $3k per year after. Is that what you meant?

Well, no not here in the USA… any capital loss like that is booked and carried forward to offset taxable capital gains until the carried losses are reduced to zero. So, were I to book a 700K capital LOSS, I could over time have up to 700K in capital GAINS that would be offset by these carried losses. Thereby no TAX on any of those gains. For ME, that would be ~ 2.5 years of taxable capital gains booked income, but with no tax. but of course I would never have that big of a loss.

The $3K per year limit, is for using capital gain LOSSES, to offset other EARNED income taxes. But capital LOSSES will offset WHATEVER capital GAINS one has in a year, or years - since the losses will carry over if unused - hence the ASEET value I put on it - until they are reduced to zero.

I think there is a thread somewhere for this type of thing. It might be in the “how much money do I need to retire” thread.

Update: I replied before reading following replies. As usual often, whatever knightshade said.

 

[adiggs]

In honor of this most recent tangent, I want to remind everybody that none of us are tax pros or financial advisers. Even if we actually are those things outside of this forum, none of us are any of those things here.

So anything you learn here, you need to go do your own research, because any decisions you make, they are your own decisions. You get to experience their consequences (good and bad). Hopefully all good ones, but either way - our decisions are our own, and our consequences are our own.

Remember:

Don't listen to this guy (or at least use their info about what might be right, but do your own research)

 

[BornToFly]

Not sure what to do tomorrow. I did not agree with Troy about Q1. Jan + February so far: Europe is up over 32% YOY (despite Germany being down because of the loss of EV credit), China sales up 9%, US probably doing well with price increases, Berlin was at record production of 6k. But now Berlin production is down for 1-2 weeks thanks to the terrorist attack, so that will be 12k deliveries gone.

The plan to help deal with my 2 year old +170/-195 BPS expiring next week that was looking so good three days ago, was to sell 180CC today for $5, which I did, to sell shares at cost basis 185 to take assignment on the -195P (or keep rolling the -195P after that to close the $10 gap). But for the plan to work, the SP needs to be over 180 next week. If the SP crates more because of Berlin tomorrow, maybe I should just sell a lot of shares to buy back cheaper. Aaarg!

 

[Yoona]

bull flag: today's Low is exactly 1.272% fib, next supp 163.21

 

[BornToFly]

bull flag: today's Low is exactly 1.272% fib, next supp 163.21
View attachment 1025383

Do you think we bounce tomorrow?

 

[Yoona]

Do you think we bounce tomorrow?

according to Daily fib and 65-Min fib, yes

according to Daily flag and 65-Min flag, no (then it will bounce)

 

[BornToFly]

The news about FSD coming to Europe later this year, and the revenue that will bring, SHOULD matter more than 1-2 week factory down time from terrorist attack. But....

 

[Jim Holder]

FWIW correction on Gary Black’s TSLA holdings, previous data was inaccurately low:

 

[ChiefRollo]

Can you define turning it into a carried asset going forward? The loss would only work to offset gains this year and just $3k per year after. Is that what you meant?

Can be used to offset gains in future years as well.

 

[Yoona]

The news about FSD coming to Europe later this year, and the revenue that will bring, SHOULD matter more than 1-2 week factory down time from terrorist attack. But....

look at price action a.k.a. what are the algos doing, and ignore noise

 

[MP3Mike]

But now Berlin production is down for 1-2 weeks thanks to the terrorist attack, so that will be 12k deliveries gone.

12k production gone. Inventory could be reduced, offsetting some of that.

 

[mongo]

AFAIK a realized cap loss can be used to offset gains in both this year, and future years, up to the total value of the loss--it carries forward fully until used.

You can only apply 3k of it against normal income each year though rather than cap gains.

But not if you are in a different country like Max Pain is...
Their pain is maxed...

 

[Jim Holder]

look at price action a.k.a. what are the algos doing, and ignore noise

If you can pls share what you are seeing the Algos doing/price action it would bring a measure of peace of mind to many here.

 

[Knightshade]

Not sure what to do tomorrow. I did not agree with Troy about Q1. Jan + February so far: Europe is up over 32% YOY

This was already explained. Several times.

The YoY you're comparing it to is a year when they still did wave delivery. 2/3rds of all Q1 deliveries were in the last month.

Since mid-23 that ended--- and now almost 2/3rds of deliveries happen in the 2/3rds of the first 2 months of a quarter, with month 3 not being massively better than 1+2.

We already know the #s for Jan/Feb. They should be about 2/3rds of the total. Leaving the quite disappointed total Troy has told us (or basic math tells us).


Do you have some reason, other than hopium, to think Tesla switched back to wave deliveries and we'll get a magical march? Because if not, the #s are pretty clear. Q1 24 in EU is going to be lower than Q1 23 EU, and not by a tiny amount.

China sales up 9%

9% is pretty tiny growth.... especially in the largest EV market in the world- and especially when you're looking at a delivery shortfall elsewhere.

C
, US probably doing well with price increases

On Model 3--- again we have actual facts on this from VIN data-- production ramp on highland has been poor, when supply is short they raise prices. That's a small margin improvement which is good, but it won't be good for delivery numbers.

Y continues to see inventory discounts of thousands, and they keep adding more and more add-on incentives all quarter, transferring FUSC if you have it, transferring FSD if you have it, first 5k, now 10k free supercharging miles. You don't keep adding demand lever pulls over and over when you've got plenty of demand.


Morgan Stanley just met with Tesla investor relations--- among the things that came out of that was delivery headwinds that are expected to continue- so much so they cut their forecast for 2024 to under 2 million.... so basically 10% growth, worldwide, for the year. They had bad news on margins aren't at the bottom yet and other things too- Sawyer has pics of the relevant info here:

https://twitter.com/x/status/1765155862337798358

 

[juanmedina]

FWIW correction on Gary Black’s TSLA holdings, previous data was inaccurately low:

View attachment 1025393

and

https://twitter.com/x/status/1765533368949628956

 

[BornToFly]

This was already explained. Several times.

The YoY you're comparing it to is a year when they still did wave delivery. 2/3rds of all Q1 deliveries were in the last month.

Since mid-23 that ended--- and now almost 2/3rds of deliveries happen in the 2/3rds of the first 2 months of a quarter, with month 3 not being massively better than 1+2.

We already know the #s for Jan/Feb. They should be about 2/3rds of the total. Leaving the quite disappointed total Troy has told us (or basic math tells us).


Do you have some reason, other than hopium, to think Tesla switched back to wave deliveries and we'll get a magical march? Because if not, the #s are pretty clear. Q1 24 in EU is going to be lower than Q1 23 EU, and not by a tiny amount.





9% is pretty tiny growth.... especially in the largest EV market in the world- and especially when you're looking at a delivery shortfall elsewhere.





On Model 3--- again we have actual facts on this from VIN data-- production ramp on highland has been poor, when supply is short they raise prices. That's a small margin improvement which is good, but it won't be good for delivery numbers.

Y continues to see inventory discounts of thousands, and they keep adding more and more add-on incentives all quarter, transferring FUSC if you have it, transferring FSD if you have it, first 5k, now 10k free supercharging miles. You don't keep adding demand lever pulls over and over when you've got plenty of demand.


Morgan Stanley just met with Tesla investor relations--- among the things that came out of that was delivery headwinds that are expected to continue- so much so they cut their forecast for 2024 to under 2 million.... so basically 10% growth, worldwide, for the year. They had bad news on margins aren't at the bottom yet and other things too- Sawyer has pics of the relevant info here:

https://twitter.com/x/status/1765155862337798358

I'm not convinced the wave ended. We'll see. But I'm looking at the next ten days now and wondering where the SP is going to go.

 

[Arul]

Personally I would say the time for buying puts was before Xmas, but easy to say that in hindsight, although I did say to at the time as well

Between then and now I did buy 100x July +p150 and have been selling against them quite profitably until this last week, well "selling against" isn't strictly true, all my puts are CSP, but it's nice to have the extra safety-net

Of course if you you buy them and the SP tanks then you'll feel very smug... another possibility it to sell some DITM calls, if you're really, really convinced it's going down - the plus of short calls is that you can roll them, long options are lost when the price goes against you

My personal plan from here is to get out of the 43x -p200's, and reposition to OTM puts against 50% of the long puts, but then if the SP really dumps, sell off the long puts and have the shorts flip to fully CSP - there comes a point where the long puts are no longer providing protection, but need to be cashed-in, likely if they go ITM I'll do it...

I learnt a lot from this, not everything but some ideas appreciated and thanks.