Wiki Selling TSLA Options - Be the House

[Yoona]

Yoona,

I continue to struggle with trying to reconcile Vanna (MM favoring $190-$200) and MP ($180); I know you don't think much of MP and the value it brings.

mp isn't greek - it's strike x sp x OI x $ intrinsic etc (anyone can spreadsheet it); i don't see value in it but there is a tendency for sp to move closer to mp when expiration approaches (whether via manipulation or not) but by then, it's already too late

for sure, large institutions that have market resources or influence can drive sp to mp on 0dte, but it's been a hit or miss, so i don't trust it (when was the last time one saw a consistent bullseye?)

besides, market is not static so mp will always change; therefore, i can't reliably use that as supp/res

mp's weakness is that it relies on OI which is published only once a day, while the greeks don't rely on OI so it can tell us (in realtime) the theoretical exposure of MM on their books - contracts x spot x IV x bid/ask x etc; it's a lot of noise BUT VANNA GIVES AN APPROXIMATE RANGE (if market is not volatile) and that's all i need to succeed

remember IC? it needs a safe range

because it can't tell direction, it's not for directional bets (gamma may be better)

but the range is not accurate every time... since vanna detects change in volatility, it is strongest on the last 2 weeks of OpEx (wild "vixpiration") and not as useful on "market is calm or sideways" weeks

long story short, i don't know anything! greeks/mp are just additional TA tools, we still need confluences to gain an edge

 

[OrthoSurg]

I'm going to be stuck helping in surgery today (for almost no money) so I won't be able to trade. Thoughts on what I should do with Fridays 190CCs with TSLA down in pre-market? Take the more manageable loss or wait for FOMC tomorrow? I wonder if we climb later today on solid China numbers....

Are you paid 25% of the total billing when you assist like here in Canada? I used to do that, assist 2 other colleagues on 6 joints replacement when I had a day off. Now that I started my private practice I make 10-20x more a day. Sometimes I go in another hospital to assist a colleague who is starting shoulder replacement surgeries and want me to teach him my tips n tricks. I consider it my volunteering days. This way I sleep better.

 

[BornToFly]

Are you paid 25% of the total billing when you assist like here in Canada? I used to do that, assist 2 other colleagues on 6 joints replacement when I had a day off. Now that I started my private practice I make 10-20x more a day. Sometimes I go in another hospital to assist a colleague who is starting shoulder replacement surgeries and want me to teach him my tips n tricks. I consider it my volunteering days. This way I sleep better.

Only 20%. And because I'm helping on the most complex spine deformity cases that take all day, I end up making about $80/hr (doing the most difficult surgeries that nobody else wants to do). It's infuriating.

 

[BornToFly]

Being the Master Trader that I am, this morning I had rolled up my -170P to -180P to snatch another dollar. Of course, they may now end up $10 ITM. At least I didn't close my -190CCs....

 

[OrthoSurg]

Only 20%. And because I'm helping on the most complex spine deformity cases that take all day, I end up making about $80/hr (doing the most difficult surgeries that nobody else wants to do). It's infuriating.

Just to make you feel a little better,

Here is my brand new 1 month old Model Y with 600 miles getting destroyed today when I was going from my 40 patients injection public clinic in the morning to my private downtown clinic where the first patient a radiologist from New York was waiting for his shoulder surgery consultation.

When you have 15 minutes to move between places and the driver told me she was distracted because her mom passed away last week and wasn’t paying attention to her lane. 15k damage

 

[Jim Holder]

@JimHolder Where art thou buddy
Hope ur doing ok

Hi, I'm good. Thanks for asking.
Just got back and catching up.

 

[intelligator]

Hey all, I want to talk about volatility and what I've learned of it's effect on options pricing. Yep, I have a lot to learn.

Monday I opened an SMCI position, well out of the money, .04 delta on sold legs. I got bruned last week with SMCI, I'll be trading a few months to gain back that lost capital. The IC I opened Monday was 100 wide for 5.83. After opening the IC I fretted earnings today. Somehow I was expecting end of week. Nonetheless, today I closed the position for 6.15, it effectively cost me $160 to get out of the position, I didn't want to risk the expected move, moreso what may follow per mr. market and MM needs. I am extremely happy to have done so. But this is what I want to get a better understanding of. Follow along please.

When I open a position, I note the expected credit. I also look a day out to see how much value the position can change in a day based on delta and gamma ... theta burn. I open a position when I see that the next day price can move up or down 6-7% and still be less than the credit received at open. So, I opened for 5.83 and according to the volatlity at that time, Tuesday I could have closed the position for even money if the SP went up or down 6-7% worst case. Ideally, I close the position the next day to earn the overnight theta burn. However, Tuesday came around, the SP was the same, the position was worth more! Per optionstrat, the position should have been worth 4.50 or so, meaning I could have kept 1.33 for holding the position overnight, assuming SP stayed the same.

Was this unexpected option pricing outcome due to increased volatility? Is it typical that leading into earnings volatility goes up? Is it best to just sit the sideline when we anticipate volatility spike?

I'll look to reopen a similar .04 delta position Wednesday, once the dust settles with this ticker. Interested in the perspective some of you take with regard to volatlity.

 

[MrMoo]

Just to make you feel a little better,

Here is my brand new 1 month old Model Y with 600 miles getting destroyed today when I was going from my 40 patients injection public clinic in the morning to my private downtown clinic where the first patient a radiologist from New York was waiting for his shoulder surgery consultation.

When you have 15 minutes to move between places and the driver told me she was distracted because her mom passed away last week and wasn’t paying attention to her lane. 15k damage

Damn that sucks! =( Brand new as well. Sigh

I got a brand new BMW around February 2020 and someone hit it in March. It was in the shop for 5 months due to covid lock downs, shipping issues and a parts shortage due to it being a new model. Apparently it cost 40k (AUD) to fix too lol.

On the bright side Model Y has plenty of parts, they'll have it fixed up right as rain.

 

[Jim Holder]

https://twitter.com/x/status/1785284342698352896

https://twitter.com/x/status/1785134450092724354

 

[Max Plaid]

Dude, they are coming to your HOUSE!… but seriously.. this could be back over $1000 by mid June July…if you’ve got something against them for cover that is.

Yes, they're fully covered by Jan 2026 +p's, so no problem there

Seems to me that the dump is overdone and doesn't point to any downturn in AI hardware mania, so could be short-lived and has no direct reflection on Nvidia from what I can tell

So yes, I could close out all the SMCI positions now at break-even, that's one possibility, or I could keep rolling the -p1000, or I could start rolling them down as best I can

Problem now is they're so ITM, and assuming it stays that way, the extrinsic value on -p1000 becomes low and the risk of early assign increases. Not the end of the world should that happen, but early assignment incurs high charges, so I prefer to avoid it

And not a lot of roll-down possibilities from here, maybe -p950 if I go out to June, or perhaps start with 5/24 to the NVDA earnings week, if that's good, will likely pop SMCI too, or the converse

 

[Max Plaid]

Being the Master Trader that I am, this morning I had rolled up my -170P to -180P to snatch another dollar. Of course, they may now end up $10 ITM. At least I didn't close my -190CCs....

I did exactly the same, 5/3 -p170's -> 5/10 -p180's, still have the -c175's, well 80x rather than 100x, looking for some sideways to consolidate and reposition

Still have the July +p150's, so no a big drama, but again, annoying

 

[Yoona]

Yes, they're fully covered by Jan 2026 +p's, so no problem there

Seems to me that the dump is overdone and doesn't point to any downturn in AI hardware mania, so could be short-lived and has no direct reflection on Nvidia from what I can tell

So yes, I could close out all the SMCI positions now at break-even, that's one possibility, or I could keep rolling the -p1000, or I could start rolling them down as best I can

Problem now is they're so ITM, and assuming it stays that way, the extrinsic value on -p1000 becomes low and the risk of early assign increases. Not the end of the world should that happen, but early assignment incurs high charges, so I prefer to avoid it

And not a lot of roll-down possibilities from here, maybe -p950 if I go out to June, or perhaps start with 5/24 to the NVDA earnings week, if that's good, will likely pop SMCI too, or the converse

what does it mean "early assignment incurs high charges"?

 

[Yoona]

Yes, they're fully covered by Jan 2026 +p's, so no problem there

Seems to me that the dump is overdone and doesn't point to any downturn in AI hardware mania, so could be short-lived and has no direct reflection on Nvidia from what I can tell

So yes, I could close out all the SMCI positions now at break-even, that's one possibility, or I could keep rolling the -p1000, or I could start rolling them down as best I can

Problem now is they're so ITM, and assuming it stays that way, the extrinsic value on -p1000 becomes low and the risk of early assign increases. Not the end of the world should that happen, but early assignment incurs high charges, so I prefer to avoid it

And not a lot of roll-down possibilities from here, maybe -p950 if I go out to June, or perhaps start with 5/24 to the NVDA earnings week, if that's good, will likely pop SMCI too, or the converse

https://twitter.com/x/status/1785588454484783514

 

[Max Plaid]

what does it mean "early assignment incurs high charges"?

In Belgium we pay 0.35% government tax against the total amount on stock transactions, up to a maximum €1600 (protecting the big players there, you see), and 0.3% broker fees for exercised options without limit, so if I have 4x -p1000 put to me, that would be $400k and I would pay $2600

This is why I don't trade shares, despite having the capital to do so

 

[Max Plaid]

Have to say that despite the recent rally my thesis on Tesla at this moment in time remains unchanged, if anything it's more bearish after Musk has been firing staff willy-nilly, seems like a bit of a scorched-earth policy he's conducting right now

Yes we have the China FSD story, and in theory an engaged Musk, but I'm not seeing it at all

So thinking to load some Jan +p150's - wanted to do this on the pop, but didn't get the opportunity, was too best stressing over the ITM calls, then the moment was kinda lost

 

[CHGolferJim]

Have to say that despite the recent rally my thesis on Tesla at this moment in time remains unchanged, if anything it's more bearish after Musk has been firing staff willy-nilly, seems like a bit of a scorched-earth policy he's conducting right now

Yes we have the China FSD story, and in theory an engaged Musk, but I'm not seeing it at all

So thinking to load some Jan +p150's - wanted to do this on the pop, but didn't get the opportunity, was too best stressing over the ITM calls, then the moment was kinda lost

We’re well on the way to giving back 1/2 or so of Monday’s bump.

 

[vikings123]

Yes, they're fully covered by Jan 2026 +p's, so no problem there

Seems to me that the dump is overdone and doesn't point to any downturn in AI hardware mania, so could be short-lived and has no direct reflection on Nvidia from what I can tell

So yes, I could close out all the SMCI positions now at break-even, that's one possibility, or I could keep rolling the -p1000, or I could start rolling them down as best I can

Problem now is they're so ITM, and assuming it stays that way, the extrinsic value on -p1000 becomes low and the risk of early assign increases. Not the end of the world should that happen, but early assignment incurs high charges, so I prefer to avoid it

And not a lot of roll-down possibilities from here, maybe -p950 if I go out to June, or perhaps start with 5/24 to the NVDA earnings week, if that's good, will likely pop SMCI too, or the converse

If you have a chance to get out break even with SMCI I think you should seriously consider that. Looks like you hedged your -Ps very well but there no know what the near term bottom of thai stock is. I guess your losses would be capped since you have the +ps to go with it?

NVDA OTOH is a much safer play. I might sell
some puts but first let’s see how the macros react to FOMC.

 

[Max Plaid]

We’re well on the way to giving back 1/2 or so of Monday’s bump.

Well I still think TSLA should be under $100 right now... and I take the rally from earnings to here, still +25% IMO

Anyway, with long-dated +p's it's a game of patience too, and allows me to sell relatively aggressive weeklies without worrying too much - especially as I still have the July +p150's, I can keep rolling the -p180's as longs they make some extra +$$, then sell off the July's if it drops further, but still have the Januaries to cover everything

If you see what I mean...

Another way to look at it, buy Jan +p150 for $13, sell weekly $1 for the next 40 expiries adds up to $40 -> OK that's very simplified, but it's my basic thought-process

And a LOT can happen between now and next year, just imagine if Q2 P&D turns out as bad as Q1, where will the stock go?

 

[Max Plaid]

If you have a chance to get out break even with SMCI I think you should seriously consider that. Looks like you hedged your -Ps very well but there no know what the near term bottom of thai stock is. I guess your losses would be capped since you have the +ps to go with it?

NVDA OTOH is a much safer play. I might sell
some puts but first let’s see how the macros react to FOMC.

I bought the +p's before the -p's to form calendar spreads, so yes I can roll them for 18 months, but if there's no extra value coming from the rolls then there's no point

So yes, I might just close everything out as it's quite the distraction too... same for NVDA, it's fun to play with several stocks, but I just don't have the bandwidth right now to spend time on them all

 

[Tachyon]

Have to say that despite the recent rally my thesis on Tesla at this moment in time remains unchanged, if anything it's more bearish after Musk has been firing staff willy-nilly, seems like a bit of a scorched-earth policy he's conducting right now

Yes we have the China FSD story, and in theory an engaged Musk, but I'm not seeing it at all

So thinking to load some Jan +p150's - wanted to do this on the pop, but didn't get the opportunity, was too best stressing over the ITM calls, then the moment was kinda lost

What rally are you eluding to? Aren’t we back to square one in 36 hrs?
I’ll be glad if we don’t end up any lower by this evening.
It’s never easy and never a smooth ride HODLing TSLA.