Wiki Selling TSLA Options - Be the House

[BornToFly]

I thought I was being so skilled, constantly adjusting my Iron Condor without a debit. The market looked so strong at the open and I thought I was perfectly centered after a 4% rip. In the end I'm not sure how much I lost after all the credits. Probably $800k. If I had done nothing everything would have expired OTM.

I'm crushed.

 

[Jim Holder]

1. A weekly bullish divergence is now in play for the first time in 2 years.
2. Fresh daily bullish divergence also shows up today after yesterday's green. This is accompanied by bullish divergence on every smaller timeframe.
3. The stock is resting on the 4.618x extension of the 1st wave down (205.6-198.4). This is a very strong limit to how extended a move can be. Even the late 2022 bear market couldn't break it.
If the stock crashes from here, so be it. But as of right now, this looks like the last liquidity grab before a real bounce (maybe a dead cat, maybe not). The risk now is to the upside.
View attachment 1025896

It's great when a plan comes together. Let's hope so! Fits well with what SW says: Risk-Skew is to the upside and should be part of any calculations for playing at OML between $170-$160 area.

I'm flat -Delta, except for a small -C250 9/20 and -C230 7/19 position, and more importantly my poor +Delta positions are so ready for some relief.

 

[Jim Holder]

I thought I was being so skilled, constantly adjusting my Iron Condor without a debit. The market looked so strong at the open and I thought I was perfectly centered after a 4% rip. In the end I'm not sure how much I lost after all the credits. Probably $800k. If I had done nothing everything would have expired OTM.

I'm crushed.

I'm so sorry! I have no words other than to send you a strong virtual hug

 

[ChiefRollo]

1. A weekly bullish divergence is now in play for the first time in 2 years.
2. Fresh daily bullish divergence also shows up today after yesterday's green. This is accompanied by bullish divergence on every smaller timeframe.
3. The stock is resting on the 4.618x extension of the 1st wave down (205.6-198.26). This is a very strong limit to how extended a move can be. Even the late 2022 bear market couldn't break it.
If the stock crashes from here, so be it. But as of right now, this looks like the last liquidity grab before a real bounce (maybe a dead cat, maybe not). The risk now is to the upside.
View attachment 1025896

I know I’m speaking out of place here but my view of money flow index movement against that of SP also signals bullish divergence, lower low on SP with lukewarm contradicting MFI (not moving correspondingly). Given what we know of Tesla’s current operational performance going into ER, it’s difficult for me to reconcile. ER is 5 weeks away however.

 

[Max Plaid]

Maxplaid is usually the guy managing these big risky bets. I'm not sure if you can roll a week out, but I'd be worried about being assigned. With NVDA volatility this could well be green on Monday, if you can extend it a week, but it won't be free.

I don't do straight spreads, so don't have the experience to deal with this scenario...

But in hindsight, looking at the close from yesterday, the AH and PM, then early trading, was BtF did was logical. Praise-be that he only flipped 50% to puts when the primal urge would have been all of them, it's shite, but could have been worse

@BornToFly I feel for you brother but you'll come out sunny-side, I'm sure

But maybe a good moment to review you trading strategy

And I hope wifey is OK with it... you need a hug, not a lecture

 

[dl003]

I know I’m speaking out of place here but my view of money flow index movement against that of SP also signals bullish divergence, lower low on SP with lukewarm contradicting MFI (not moving correspondingly). Given what we know of Tesla’s current operational performance going into ER, it’s difficult for me to reconcile. ER is 5 weeks away however.

ER may be a miss, but what if the sharks has scared everyone out of the water before then? It may very well be a dead cat and I'm fully prepared for that, but stocks don't bottom on good news & fundamentals. The opposite. The question is what is priced in at 170?

 

[ChiefRollo]

I thought I was being so skilled, constantly adjusting my Iron Condor without a debit. The market looked so strong at the open and I thought I was perfectly centered after a 4% rip. In the end I'm not sure how much I lost after all the credits. Probably $800k. If I had done nothing everything would have expired OTM.

I'm crushed.

I’m sorry bud. You did it based on logic and your instinct.

FWIW, I still haven’t told the missus about my last crater I’m still trying to recover from.

 

[WattsHappening]

I thought I was being so skilled, constantly adjusting my Iron Condor without a debit. The market looked so strong at the open and I thought I was perfectly centered after a 4% rip. In the end I'm not sure how much I lost after all the credits. Probably $800k. If I had done nothing everything would have expired OTM.

I'm crushed.

Ah, s&:t. I'm so sorry to hear how this ended. Hang in there @btf!

 

[BornToFly]

I thought I was being so skilled, constantly adjusting my Iron Condor without a debit. The market looked so strong at the open and I thought I was perfectly centered after a 4% rip. In the end I'm not sure how much I lost after all the credits. Probably $800k. If I had done nothing everything would have expired OTM.

I'm crushed.

My error was not closing out the +900/-930 side when it dropped from 970 to 935. At that point I should have just taken the loss and not let it go ITM. I just didn't believe it would keep dropping after the strong open. SO STUPID.

 

[Jim Holder]

I know I’m speaking out of place here but my view of money flow index movement against that of SP also signals bullish divergence, lower low on SP with lukewarm contradicting MFI (not moving correspondingly). Given what we know of Tesla’s current operational performance going into ER, it’s difficult for me to reconcile. ER is 5 weeks away however.

A few considerations for the bullish divergence, though I may be TOTALLY wrong and showing my ignorance about how these things work:
1) Q1 Energy might balance any shortfall in auto
2) Auto might not be as bad as predicted.
3) The bad news is already priced in
4) None (or only some) of the above, and it's just that SP is already down plenty from $235-$175, perhaps running out of sellers.
5) Other natural/neuro forces are at play keeping price where it is (i.e. EW end of full correction; not too expensive, not too cheap).

 

[thenewguy1979]

A few considerations for the stall in falling further, though I may be TOTALLY wrong and showing my ignorance about how these things work:
1) Q1 Energy might balance for any shortfall in auto
2) Auto might not be as bad as predicted.
3) None (or only some) of the above, and it's just SP is already down deeply from $235-$175, perhaps it's "baked in" and/or running out of sellers.
4) Other natural/neuro forces are at play keeping price where it is (i.e. EW end of full correction; not too expensive, not too cheap).

Or as dl003 acknowledged could be a DBC and we fall-off some more.

Planning to buy some 185x C after CPI then ride the upward bounce (whether DCB or not) then offload prior to ER.
Let ER play out see big picture then wait for clear direction before dip back in.

 

[Max Plaid]

Is there a way to see/track this easily or need to keep checking chain?

In this case it's because I hold these +puts and was a bit discombobulated as to why they were + when the SP was +

I have seen though, that the price of options moves prior to the SP, see it with TSLA all the time, but it's a bit more subtle than what I saw with NVDA today

I guess the obvious explanation is the tail wagging the dog, where the options market is dictating the stock price, no, really, say it ai't so, Mo!

Otherwise, my general disposition is that although there's profits in NVDA and SMCI, for an old dog like myself, it's hard spinning three plates at once, while I'm jiggling one, the other two are wobbling and one falls and breaks... so maybe better to keep the eye on a single ball on the future, once these have played out

 

[Jim Holder]

Looking ahead to next week, we are trading below the $180 put wall. If I'm not mistaken this means MM would prefer us to get above it and might provide some support. Anyone know if this is a thing?

 

[Max Plaid]

I thought I was being so skilled, constantly adjusting my Iron Condor without a debit. The market looked so strong at the open and I thought I was perfectly centered after a 4% rip. In the end I'm not sure how much I lost after all the credits. Probably $800k. If I had done nothing everything would have expired OTM.

I'm crushed.

Gave you a "love" mate, not for the situation, but for empathy

 

[Jim Holder]

In this case it's because I hold these +puts and was a bit discombobulated as to why they were + when the SP was +

I have seen though, that the price of options moves prior to the SP, see it with TSLA all the time, but it's a bit more subtle than what I saw with NVDA today

I guess the obvious explanation is the tail wagging the dog, where the options market is dictating the stock price, no, really, say it ai't so, Mo!

Otherwise, my general disposition is that although there's profits in NVDA and SMCI, for an old dog like myself, it's hard spinning three plates at once, while I'm jiggling one, the other two are wobbling and one falls and breaks... so maybe better to keep the eye on a single ball on the future, once these have played out

Thanks. I believe it's mostly due to shifts in IV. I know that @dl003 monitors option prices movements to very good results for predicting direction.

Re spinning several plates by playing NVDA/SMCI etc along with TSLA, I fully agree it's not for all. I haven't joined the fun at all and just stuck to what I know and am happy with the $15k I scalped off TSLA this week while the SP gyrated all over. It's sufficient for me (DBG). A year ago I might have taken more risk and followed the herd (and might even have profited some) but I've been whipped and chastened by the market and learnt to stay in my lane.

"Better slow nickels than fast dollars laced with TNT"

 

[Max Plaid]

I’m sorry bud. You did it based on logic and your instinct.

FWIW, I still haven’t told the missus about my last crater I’m still trying to recover from.

I've always been fully transparent with the wife. Given that our total cash investment since 2015 was $112k and at ATH we hit $5.1million she's said "do what you want, it all for free anyway"

I do inform her from time to time, bit not on every trade, it goes OK, the only regret I have, like most of us, is not cashing-out at $1214, still have way more that if I'd never traded it...

 

[ChiefRollo]

I've always been fully transparent with the wife. Given that our total cash investment since 2015 was $112k and at ATH we hit $5.1million she's said "do what you want, it all for free anyway"

I do inform her from time to time, bit not on every trade, it goes OK, the only regret I have, like most of us, is not cashing-out at $1214, still have way more that if I'd never traded it...

Of course I have to come clean…during tax season. That’s all she cares about, net gain for the year; I kick the can down the road quite a bit.

 

[Max Plaid]

My error was not closing out the +900/-930 side when it dropped from 970 to 935. At that point I should have just taken the loss and not let it go ITM. I just didn't believe it would keep dropping after the strong open. SO STUPID.

I think it was the rise in AH, PM and early trading that screwed your perspective (and mine), was a net 10% down from the high of the day, which just hasn't happened on NVDA since when?? But it came today...

You can't blame yourself for today's specifics, was random, it was coming at some point, just happened to be today

But it's a great moment to reflect and adapt, assuming you still have capital to trade, which I think is the case

At least you don't need to sell any aircraft this time, eh?

 

[tivoboy]

I have seen though, that the price of options moves prior to the SP, see it with TSLA all the time, but it's a bit more subtle than what I saw with NVDA today

I guess the obvious explanation is the tail wagging the dog, where the options market is dictating the stock price, no, really, say it ai't so, Mo!

Otherwise, my general disposition is that although there's profits in NVDA and SMCI, for an old dog like myself, it's hard spinning three plates at once, while I'm jiggling one, the other two are wobbling and one falls and breaks... so maybe better to keep the eye on a single ball on the future, once these have played out

That is, quite frankly EXACTLY what it is… the derivatives market which is many many multiples of the underlying equity valuation is totally pulling things up and down. At least and especially in highly traded derivative stocks like TSLA, NVDA, AAPL - historically at least, and on and on.

You should read the white paper on this from I think Jan 2020? When it became clear that Softank was the “Nasdaq Whale” that was totally manipulating the tech equity markets in the 2nd half of 2019. They put about 4B to work in derivatives mostly, and bought underlying and made I think 20B?

Starting about that time, Tsla became a beloved target for this type of manipulation and it has only recently slowed down a bit.

 

[thenewguy1979]

Thanks. I believe it's mostly due to shifts in IV. I know that @dl003 monitors option prices movements to very good results for predicting direction.

Re spinning several plates by playing NVDA/SMCI etc along with TSLA, I fully agree it's not for all. I haven't joined the fun at all and just stuck to what I know and am happy with the $15k I scalped off TSLA this week while the SP gyrated all over. It's sufficient for me (DBG). A year ago I might have taken more risk and followed the herd (and might even have profited some) but I've been whipped and chastened by the market and learnt to stay in my lane.

"Better slow nickels than fast dollars laced with TNT"

I only touch NVDA twice. Both from selling ITM Puts as the stock was pumping. Got scared twice when a 1 day movement caused them to be DITM. Both times saved by sheered lucks. Not touching it with a 10ft pole especially now. But monitoring it to once a while dip in QQQ.