Follow up question: If the basic assumption here is that the two big stooges (who are trading all these deep in-the-money options with eachother every day) are doing this to stay short on TSLA but gradually switching their stock to options to be short on, to avoid lending charges, then at some point they will have exchanged their entire actual stock position to an equivalent, still short, position on a combination of calls and puts right? And there is still no sign of them slowing down the pace which must mean that they had a very large short position in actual TSLA stock to begin with? Now, they are trading in big volumes in the may calls. So in effect unless TSLA drops significantly in time for the may options expiration they will be sitting on a lot of worthless calls? My point being they are staying short only on option instead of stock (thereby avoiding high lending charge rates). But unless TSLA pulls back quite a lot they will be sitting with quite some losses come may?
the most likely candidates for the stooges are either shorts who can save borrowing charges or a larger player who can lend the shares and just earn yield from the long stock short call package.
regarding what happens to the calls, actually if you follow the open interest carefully what you'll see is those deep in the money calls are getting exercised away from them as the days go by. in some cases many got exercised away from them just 2 or 3 days later. but larry & moe don't care, by doing the trades on tuesday they guarantee the trades settle friday and that they can earn at least the 3 nights of weekend lending interest before anyone can exercise their position away.
as they get closer to expiration, they aren't sitting on worthless calls. they are sitting on deep in the money calls. those calls get exercised and converted to short shares. so if the stooge is a short, he's back to being short, and if the stooge is a lender doing a yield trade, his long stock offsets the call exercise.
if the stooges are shorts, they're getting killed anyway. they just save a couple bucks not having to pay 40%+ interest to borrow shares.
hope that makes sense.