It may have begun earlier which lead to Zack leaving, and got worse since.
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Wiki Selling TSLA Options - Be the House
- Thread starter adiggs
- Start date
1) buying powerTHANK YOU!!!!
Sorry to disagree, but B/W <> CSP... they are the same at setup time only but 6/7 mechanics isn't the same
1) buying power
- shares + CC have positive bp
- CSP has negative bp (CSP has risk of margin call)
2) income if sp is going up too fast (aka Hertz)
- B/W can be decoupled: close the CC quick (for maybe a loss) and let the stock ride up; income is unlimited and bigger profit due to 1 delta
- CSP can be closed but max profit is capped at initial credit
3) if sp is dropping fast (black swan)
- it is cheaper to close CC than CSP
- CSP eventually has risk of early assignment
4) at 0dte, stock < strike
- B/W and CSP have almost same realized gain
- B/W expires relaxed with stock in hand; in danger of weekend MM shenanigans
- CSP is panicking at this stage because of unrealized loss if assigned, especially if sp keeps dropping
5) at 0dte, stock = strike (rare?)
- B/W and CSP have almost same realized gain
- B/W expires with stock in hand; in danger of weekend MM shenanigans
- CSP expires with no stock in hand
6) at 0dte, stock > strike (this is the only time B/W = CSP)
- B/W and CSP have almost same realized gain
- B/W expires with no stock in hand
- CSP expires with no stock in hand
7) at 0dte, stock way way way higher than strike
- B/W will have regrets selling the CC due to "lost income opportunity"
- CSP doesn't care, he just wants the initial credit
- shares + CC have positive bp
- CSP has negative bp (CSP has risk of margin call)
I don't understand what you mean by positive and negative buying power. BW can open you up to margin call as well. Starting with 74k in margin, you can either use that 74k to open a CSP, or spend 76.5k on 100s, then sell a 740CC to recoup 2.5k + premium in margin. Either way, you will have $74k - premium at risk. If the stock crashes, both the CSP and the BW drop with nearly the same delta.
2) income if sp is going up too fast (aka Hertz)
- B/W can be decoupled: close the CC quick (for maybe a loss) and let the stock ride up; income is unlimited and bigger profit due to 1 delta
- CSP can be closed but max profit is capped at initial credit
By buying back the CC, you're simply adding a 740C to your BW. You can do the same with a CSP, try it. You can add a 740C to your CSP. Same R:R. Same premium forfeited. Same 1 delta.
3) if sp is dropping fast (black swan)
- it is cheaper to close CC than CSP
- CSP eventually has risk of early assignment
It's cheaper to close the CC, but what about the shares you're holding? Is it cheaper to close them out than the CSP? No. They will lose by roughly the same amount. CSP has risk of early assignment but the shares in a BW have already been assigned to you via a buy order. You're only thinking about the CC but not about the shares. That's what I meant by 2 separate transactions tricking your brain into thinking a BW isn't a CSP.
4) at 0dte, stock < strike
- B/W and CSP have almost same realized gain
- B/W expires relaxed with stock in hand; in danger of weekend MM shenanigans
- CSP is panicking at this stage because of unrealized loss if assigned, especially if sp keeps dropping
If you buy 100s at 765, and it closes Friday < 740, how can you relax? Your CC is looking pretty, but your shares have lost > $2.5k. Both should panic into the weekend.
5) at 0dte, stock = strike (rare?)
- B/W and CSP have almost same realized gain
- B/W expires with stock in hand; in danger of weekend MM shenanigans
- CSP expires with no stock in hand
If you sell a 740 CSP (740P for short) and it closes Friday at 740, your CSP will expire worthless, you can then proceed to buy 100s at 740 in the AH. Voila, now you have 100s at 740, same as if you'd bought 100s @ 765 then sold a 740CC that expired worthless).
7) at 0dte, stock way way way higher than strike
- B/W will have regrets selling the CC due to "lost income opportunity"
- CSP doesn't care, he just wants the initial credit
Both will end the week in cash. BW will have enjoyed the extrinsic value of the 740CC. CSP will have enjoyed the extrinsic value of the 740P. Roughly equal amounts. The only difference is how each feels even though both should feel the same way. Humans are strange at times. If the BW fears loss of income, why did they even sell an ITM CC?
I have done this mental exercise a thousand times. You can flip from an ITM BW to an OTM BW, for example: buy 100s @ 765 and sell a 800C vs sell a 800P (ITM). The result is going to be the same.
Elon Musk’s Robotaxi Dreams Plunge Tesla Into Chaos
Edward Ludlow and Dana Hull, Bloomberg News
2h ago
(Bloomberg) -- Elon Musk’s underlings at Tesla Inc. are accustomed to chaos. It comes with the territory of working for a chief executive who sets exacting targets and often abruptly switches directions — whose biographer describes his more intense moods as “demon mode.”
But even by Tesla standards, this year has been unruly. Its stock has slid more than 40% amid slumping sales, confusing product decisions and more price cuts. Its once-dominant position in China’s EV market is under assault. A visit with India’s Prime Minister Narendra Modi for an anticipated investment announcement was called off at the last minute. All the while, the board has tried to revive a $56 billion payout to Musk that a judge voided in January, on the grounds that directors had acted as “supine servants” to the CEO.
On Tuesday, Tesla is expected to report a 40% plunge in operating profit and its first revenue decline in four years. Musk has ordered up the company’s biggest layoffs ever and staked its future on a next-generation, self-driving vehicle concept called the robotaxi. People familiar with his directives, who asked not to be identified discussing internal deliberations, are unsettled by the changes the CEO wants to push through.
The idea of creating an autonomous taxi service has been kicking around Tesla for at least eight years, but the company has yet to stand up much of the infrastructure it would need, nor has it secured regulatory approval to test such cars on public roads. For the moment, Musk has put off plans for a $25,000, mass-market vehicle that many Tesla investors — and some insiders — are pushing for and believe is crucial to the carmaker’s future.
In the wake of media reports on the strategic shift, key managers including Drew Baglino, an 18-year company veteran who headed Tesla’s powertrain engineering and energy business, have left.
Musk, 52, has steered Tesla out of many jams in the past. At $469 billion, the company is still valued at more than nine times the market capitalization of General Motors Co. or Ford Motor Co. But after losing almost $350 billion in market cap over four months, employees, investors and analysts alike are bewildered and second-guessing the company’s strategy.
“The stock will need to undergo a potentially painful transition in ownership base, with investors previously focused on Tesla’s EV volume and cost advantage potentially throwing in the towel,” Deutsche Bank analyst Emmanuel Rosner said last week, downgrading the shares from a buy and slashing his price target by more than a third.
Musk has signaled on his social media network that the recent moves amount to activating wartime CEO mode. He liked a post saying as much after sending a companywide email announcing that Tesla was cutting more than 10% of global headcount, which would mean eliminating at least 14,000 jobs.
The actual number of people ushered out may exceed 20,000, according to people familiar with the company’s planning. Musk’s reasoning, according to one person with direct knowledge of his edicts, was that Tesla should reduce headcount by 20% because its vehicle deliveries dropped by that amount from the fourth quarter to the first quarter.
For those still among Tesla’s ranks after this culling, Musk has radically altered the marching orders. The company is “going balls to the wall for autonomy,” he declared last week. The robotaxi is now taking precedence over a cheaper car he first teased four years ago, both with respect to setting timelines for prototypes and arranging production capacity, one person familiar with the planning said.
Musk has talked a big game about autonomy for over a decade, and has convinced customers to pay thousands of dollars for a product Tesla has marketed as Full Self-Driving, or FSD. The name is a misnomer — FSD requires constant supervision and doesn’t render vehicles autonomous — but Musk has repeatedly predicted it’s on the verge of measuring up to the branding. “I’m the boy who cried FSD,” he said in July.
Musk and top engineers are particularly bullish about a major change in how FSD now works. Cameras placed around the company’s cars are taking in video and using this footage to dictate how the vehicle drives, instead of relying on software code. Ashok Elluswamy, a director of Tesla’s Autopilot program, wrote on X last month that this should lead to “unprecedented progress.”
But optimism around FSD and Musk’s belief that this new approach could bring about robotaxis is clouding the future of Tesla’s $25,000 car project. People with knowledge of Tesla’s plans disputed the notion that the program has been canceled altogether. All along, the company has been pursuing a low-cost vehicle architecture that will underpin several different types of models, one of which would have no steering wheel or pedals.
While these people confirmed the robotaxi is being prioritized, one described the next-generation vehicle project as an effort to wring cost reductions out of components and production methods, then apply those innovations to cheaper iterations of the Model Y and Model 3, the company’s two most popular EVs. Teams are placing particular emphasis on bringing these cost savings to bear with the Model Y, the best-selling vehicle in the world last year.
It’s unclear just how much solace this might be to investors who’ve been spooked by reports that Tesla’s answer to affordable options like the Toyota Corolla has been scrapped entirely. Many are concerned that the only new model the company will offer to consumers in the half decade after the Model Y’s debut will be the Cybertruck, an expensive pickup that’s difficult to build. Last week, the company recalled the almost 3,900 trucks it’s sold to fix faulty accelerator pedals.
“Investors, particularly institutional ones, are losing patience,” said Bloomberg Intelligence analyst Steve Man. “The initial hype around Full Self-Driving and robotaxis has waned, and the pendulum has swung in the opposite direction.”
Reorienting Tesla around robotaxis is risky. While federal agencies have taken a permissive approach to regulating technology that has the potential to make roads safer, scrutiny at the state and local level has proven difficult to navigate.
Former Governor Doug Ducey welcomed Uber Technologies Inc.’s self-driving vehicles to Arizona “with open arms and wide-open roads” in 2016, only to ban them after one fatal collision with a pedestrian in 2018. Uber sold off its autonomous-vehicle unit two years later.
More recently, GM’s Cruise has spent the last six months working its way back to robotaxi testing after one of its cars struck and dragged a pedestrian in San Francisco. California also is holding up an expansion by Alphabet Inc.’s Waymo after several incidents, including one of its vehicles hitting a cyclist.
Musk nevertheless is betting Tesla can make robotaxis a reality by making FSD available to more consumers and cutting prices. He’s pushing test drives and free 30-day trials to promote the feature, buoy revenue and ingest more camera footage.
Tesla is building data centers in Buffalo, New York, and Austin, where it’s headquartered, to process the footage captured by its vehicles and train its driving systems. The Buffalo site is further along, while the Austin one is struggling with cost overruns, people familiar with the projects said.
The rationale for Tesla’s layoffs was not to squeeze savings from parts of the company and redirect spending to robotaxis, according to a person with direct knowledge of how job cuts were drawn up. Teams across the organization — including those working on autonomy — were given equal targets for headcount reduction, this person said.
Based on interviews with more than a dozen employees affected across the US, the firings were poorly organized and executed.
Emails that began “Dear Employee” were sent to personal addresses after midnight. At Tesla’s battery factory in Nevada, many staff started their Monday with gridlock at the front gate. They were diverted to a parking lot where security guards scanned badges to discern who still had jobs and who had been laid off. One person who learned they had been let go this way said it was the coldest and most humiliating experience of their career.
“A lot of people found out they were no longer employed in the middle of their shift, or after arriving for what was thought to be just another Monday,” Jordana Hernandez, a former service manager in Virginia, wrote on LinkedIn. “That’s the part that hurts. Giving literal blood sweat and tears to a company that showed zero humanity for the people that have sacrificed more than anyone outside of Tesla can imagine.”
The Saturday night before the layoffs began, Musk was striking dramatic poses on the red carpet and joking about who should play him in an upcoming biopic.
Days later, Tesla Chair Robyn Denholm criticized a Delaware court for throwing out the board’s pay package for Musk and urged shareholders to re-approve it. Around this time, the CEO learned the company had skimped on what it was offering staff whose jobs were just eliminated.
“It has come to my attention today that some severance packages are incorrectly low,” Musk wrote in an email to Tesla’s remaining employees. “My apologies for this mistake. It is being corrected immediately.”
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The numbers may be bad, but it's definitely not a surprise to Musk. He lay off people when numbers are good or bad. He just runs his company how he sees fit and really don't care much about optics and one earnings report. How were earnings from June 2022? Musk laid off 10% of salary workers that month. Remember how 200 autopilot engineers were laid off that month and then a month later Karpathy left? Remember the speculation then? People were saying how Musk was dangerous and Karpathy wanted radar, and bla bla bla how Tesla's FSD team is imploding....
How's FSD and autopark doing today? People like to use singular event to make up stories to fit a narrative. We have learned time and time again.
1. Musk runs his company the way he wants to run his company. You shouldn't read too much into anything.
2. Things will mostly turn out fine or if not better, and those singular events become a distant memory no one ever talk about anymore.
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Nasdaq futures are up but TSLA, in overnight trading, is trading in the 143s. Who needs earnings when we get news every day.
I think Elon will have a lot of export do on the earnings call. I’m personally getting ready for popcorn and sound bites.
Anybody know when we will see a dead cat bounce? Asking for a friend.
I think Elon will have a lot of export do on the earnings call. I’m personally getting ready for popcorn and sound bites.
Anybody know when we will see a dead cat bounce? Asking for a friend.
Are you sure you want to take that position? Because that position means full culpability for Mr. Musk.
If Mr. Musk was surprised for whatever reason, then he can plausibly explain on the call why he was surprised and how he is going about rectifying Tesla’s current situation, and how things will be so much better now that he is spending most of his his time focused on Tesla for the foreseeable future (at least until comp plan is voted on).
If Mr. Musk states he was not surprised, well, then the situation Tesla is in came about fully under his watch, with him having full awareness and (as CEO) full responsibility, with no way of dodging how he was aware of Tesla’s status throughout the quarter and not having done anything (or enough) to rectify it during the quarter.
Weekly because they’re cheap for OTM puts - except for next week with ER so I have +140p/-130p spreads instead.
Thanks. Do you mean +140p/-130p for this Friday 4/26 (since ER is this Tuesday)?
When Musk told people on the earnings call that there's a storm coming but Tesla will be positioned best after the storm 2 earning calls ago, does he sound surprised about today's numbers? He even said "if there's a dip, buy the dip". He pretty much warned everyone and a bunch of us sold calls.
Amazing that Bloomberg knows people with insider information, in every facet of the company, who are willing to talk to them....
At what price is Elon's personal line of credit at risk? I fear that is the point he starts getting a clue.
I for one wish that if we are going to break 139, please let it happen tomorrow so I can fully position for the downside going into ER. I loaded some hedge at 150 151 but not enough since I expect the 140s to hold. Market will probably hold the 140s going into ER though. The scariest thing would be one massive red candle after numbers and I cant do nothing about it.
thenewguy1979
"The" Dog
I almost pee my pant last Friday when NVDA drop nearly 100 points. Out of the blue and no news really except SMCI not annoucing earning numbers.
Luckily it was a single Long Call and not any short put that went underwater.
I do have a feeling we are in for a crazy ER….
SebastienBonny
Member
Probably nothing.
Let's see if this gets reported as much as the "negatives".
Holding my gun for now. Consider buying more TSLA and writing covered calls against them (B/W), but will wait until earnings to see what direction we are going.
TSLA looking pretty bad pre-market, sub-140 today? IV also popped to 110%
I do still have 100x -p140 / -c150 in play, but I really struggle to see what could be said in the earnings call to pop the stock, but there's plenty to dump it further from here
Need to get those puts out of the way, so I'm planing to roll the -c150's down to -c140 for this week and use the premium to buy-back the -p140's, going to start writing -p90's, I'm a buyer at that price
Yes, -c140's down here is a bit risky, but easier to roll those up for the next two years than end up with puts $50 ITM...
That being said, I do also have 20x Dec 2025 -p190's (and -c190's), that I need to keep an eye on...
I do still have 100x -p140 / -c150 in play, but I really struggle to see what could be said in the earnings call to pop the stock, but there's plenty to dump it further from here
Need to get those puts out of the way, so I'm planing to roll the -c150's down to -c140 for this week and use the premium to buy-back the -p140's, going to start writing -p90's, I'm a buyer at that price
Yes, -c140's down here is a bit risky, but easier to roll those up for the next two years than end up with puts $50 ITM...
That being said, I do also have 20x Dec 2025 -p190's (and -c190's), that I need to keep an eye on...
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