Wiki Selling TSLA Options - Be the House

[traxila]

His method is entirely foreign to me so I can't comment much on it. My read is:

It's still too early to freak out. People with a lot of money bought TSLA in quantity sufficient to produce a 110% rise in just over a month. This kind of rally doesn't reverse overnight. The topping process can be brutally choppy which sucks in bears here and there, only to squeeze them every other day.

There is no chance of a new low, given the current chart. This kind of rally is the mother of all impulsive sequences and so it's either one of 2 things: it's wave 1 of a 5 wave up or wave A of a 3 wave zig zag up. Either way, a new high is guaranteed, no matter how deep the retracement will be.

This deep reversal today is completely normal. In every TSLA rally, there is the real stuff and there is the froth, which is gamma induced overextension. When this gamma is reversed, it's going to produce sharp drops but that doesn't make the real stuff any less real. Now we just have to wait to find out how far we need to drop before we get to the real stuff.

My current level is 197. More likely than not we bounce tomorrow from here, targeting 208. Next is 186-188. Unless the market outright crashes from here, this should be the bottom before Investor's Day on 3/1. Break that and we get to 175. A sharp bounce from 175 is highly likely and that should be the bottom before Q1 P&D. Might overshoot it a bit and get to 171 but that should be it.

As I've mentioned at least twice before, TSLA will be bullish for the next 2 months. Why? Because the weekly momentum has flipped to bullish as we closed last week above 191. Understand this: we'd been on the weekly bearish train for almost 15 months, from November 2021 to January 2023. It was a brutal 15 months that saw a lot of people chewed out. Then another group of people with a vast amount of money decided it's time to put an end to that trend last week and they're willing to put their money where their mouth is. That won't easily change. I expect to see TSLA close out Q1 strong. If I have to pick a magnet for price, I'd say this 202 area.

Keep up the good work @dl003 !

 

[dl003]

His method is entirely foreign to me so I can't comment much on it. My read is:

It's still too early to freak out. People with a lot of money bought TSLA in quantity sufficient to produce a 110% rise in just over a month. This kind of rally doesn't reverse overnight. The topping process can be brutally choppy which sucks in bears here and there, only to squeeze them every other day.

There is no chance of a new low, given the current chart. This kind of rally is the mother of all impulsive sequences and so it's either one of 2 things: it's wave 1 of a 5 wave up or wave A of a 3 wave zig zag up. Either way, a new high is guaranteed, no matter how deep the retracement will be.

This deep reversal today is completely normal. In every TSLA rally, there is the real stuff and there is the froth, which is gamma induced overextension. When this gamma is reversed, it's going to produce sharp drops but that doesn't make the real stuff any less real. Now we just have to wait to find out how far we need to drop before we get to the real stuff.

My current level is 197. More likely than not we bounce tomorrow from here, targeting 208. Next is 186-188. Unless the market outright crashes from here, this should be the bottom before Investor's Day on 3/1. Break that and we get to 175. A sharp bounce from 175 is highly likely and that should be the bottom before Q1 P&D. Might overshoot it a bit and get to 171 but that should be it.

As I've mentioned at least twice before, TSLA will be bullish for the next 2 months. Why? Because the weekly momentum has flipped to bullish as we closed last week above 191. Understand this: we'd been on the weekly bearish train for almost 15 months, from November 2021 to January 2023. It was a brutal 15 months that saw a lot of people chewed out. Then another group of people with a vast amount of money decided it's time to put an end to that trend last week and they're willing to put their money where their mouth is. That won't easily change. I expect to see TSLA close out Q1 strong. If I have to pick a magnet for price, I'd say this 202 area.

Also I need to clarify it again. When I say bullish for the next 2 months, I don't mean it will go up. Every rally pauses and consolidates eventually. A bullish consolidation phase should be:
a. Shallow
b. Not breaking major supports such as the daily uptrend at 175 or the 200 WEMA at 171.
c. Ending in the top half of the consolidation range

 

[Jim Holder]

Also I need to clarify it again. When I say bullish for the next 2 months, I don't mean it will go up. Every rally pauses and consolidates eventually. A bullish consolidation phase should be:
a. Shallow
b. Not breaking major supports such as the daily uptrend at 175 or the 200 WEMA at 171.
c. Ending in the top half of the consolidation range

Thanks, learning more with every post of yours.

So is 220-250 forlorn for now till next round (after 175 dip whenever it comes, maybe April)?

 

[dl003]

Thanks, learning more with every post of yours.

So is 220-250 forlorn for now till next round (after 175 dip whenever it comes, maybe April)?

I havent ruled that out yet, but if we see 190, I will.

 

[vikings123]

My current level is 197. More likely than not we bounce tomorrow from here, targeting 208. Next is 186-188. Unless the market outright crashes from here, this should be the bottom before Investor's Day on 3/1. Break that and we get to 175. A sharp bounce from 175 is highly likely and that should be the bottom before Q1 P&D. Might overshoot it a bit and get to 171 but that should be it.

I agree with the 196/197-10 day SMA level being key in the short term. You saw the stock respected that level in AH.

I could see a scenario where the macros roll over very similar to what happened from Aug to Oct of 2022. We had a short squeeze in July just like the one we saw recently.

One thing for sure is when TSLA breaks key levels(both on upside and downside) it typically gets to the next level no matter what the news is. So yeah if we don’t close above 196 tomorrow I can see us getting to the 184/185 level next week.

 

[intelligator]

Well, calling pop and drop Tuesday for Wednesday didn't hit, but wasn't wrong for the week, LOL. Wednesday went completely opposite, gamma was through the roof. Although, the put side was just as OI heavy as the call side. Someone always knows something. Here's yesterday and today just for fun. Looks to me that Friday may end above 200. I hope so because today I played the high and sold 2/17 -c227.5, bought back at 80%, then sold a BPS 2/17 -195/+190 BPS (should have refrained) that I'd like to see expire worthless. Gamma flip is 197, so if we wander down to the low 190s, I guess a roll will be necessary. GLTA!

 

[OrthoSurg]

His method is entirely foreign to me so I can't comment much on it. My read is:

It's still too early to freak out. People with a lot of money bought TSLA in quantity sufficient to produce a 110% rise in just over a month. This kind of rally doesn't reverse overnight. The topping process can be brutally choppy which sucks in bears here and there, only to squeeze them every other day.

There is no chance of a new low, given the current chart. This kind of rally is the mother of all impulsive sequences and so it's either one of 2 things: it's wave 1 of a 5 wave up or wave A of a 3 wave zig zag up. Either way, a new high is guaranteed, no matter how deep the retracement will be.

This deep reversal today is completely normal. In every TSLA rally, there is the real stuff and there is the froth, which is gamma induced overextension. When this gamma is reversed, it's going to produce sharp drops but that doesn't make the real stuff any less real. Now we just have to wait to find out how far we need to drop before we get to the real stuff.

My current level is 197. More likely than not we bounce tomorrow from here, targeting 208. Next is 186-188. Unless the market outright crashes from here, this should be the bottom before Investor's Day on 3/1. Break that and we get to 175. A sharp bounce from 175 is highly likely and that should be the bottom before Q1 P&D. Might overshoot it a bit and get to 171 but that should be it.

As I've mentioned at least twice before, TSLA will be bullish for the next 2 months. Why? Because the weekly momentum has flipped to bullish as we closed last week above 191. Understand this: we'd been on the weekly bearish train for almost 15 months, from November 2021 to January 2023. It was a brutal 15 months that saw a lot of people chewed out. Then another group of people with a vast amount of money decided it's time to put an end to that trend last week and they're willing to put their money where their mouth is. That won't easily change. I expect to see TSLA close out Q1 strong. If I have to pick a magnet for price, I'd say this 202 area.

Can we nominate this post for the Post of merit or is that reserved for the other thread

 

[adiggs]

Can we nominate this post for the Post of merit or is that reserved for the other thread

You did! Sadly our variation for posts of merit are more of the timeless educational variety that we add to the accompanying WIKI thread.

Nominated, but due to it being specific to this point in time, we'd need to trap you in amber along with the post!

 

[jeewee3000]

STO 3/31 $195csp @14.5. Missed the best price ($15.5) slightly.

I figure this won't go very deep ITM at the worst and if we stay around $200 by P&D I can resell a put in April.

Worst case I can take assignment and sell $200 calls.

 

[UltradoomY]

STO 3/31 $195csp @14.5. Missed the best price ($15.5) slightly.

I figure this won't go very deep ITM at the worst and if we stay around $200 by P&D I can resell a put in April.

Worst case I can take assignment and sell $200 calls.

Cost basis would be $186.50!

Nice position.

I won't be in front of my terminal till after lunch.....

 

[intelligator]

A butterfly call is a combination of 2 call spreads, 1 bullish & the other bearish
Buy 225/240 bull call spread
Sell 240/255 bear call spread
Maximum profit is realized if the stock closes exactly at 240 on 2/24. Partial profit is realized if the stock closes anywhere else between 225/255.
It's not too late to open these. This morning I opened them during the dip for $0 (including the short puts). They're now 0.48 each but if you are stuck with ITM CCs, this is the price to pay to somewhat have a chance at catching up.

When you opened the butterfly yesterday, the dip was around 209, I assume. Are these still a worthwhile range now while at 200? Meaning, do we see next week 240 as a possible target?

 

[UltradoomY]

Just opened a lot (for me) Synthetics for next week

Sell to Open $200P
Buy to Open $200C
Net credit - $1 each

Will look to close the P's on Tuesday as Market is closed Monday.
Thanks for the free theta!


Also closed the other half of my sold side Butterfly calls (the $140's For $0.40 each)

 

[dl003]

When you opened the butterfly yesterday, the dip was around 209, I assume. Are these still a worthwhile range now while at 200? Meaning, do we see next week 240 as a possible target?

no, not anymore. Not next week. The structure of the reversal from 218 is impulsive, therefore it is only the first leg down. We should bounce to 208 sometimes next week but chances are we'll go down again. 240 can happen but not without sufficient basing. If you feel hairy about it, you can close the butterfly call to recoup some premium and use that to roll the 192.5P down to 187.5 or something like that.

 

[intelligator]

no, not anymore. Not next week. The structure of the reversal from 418 is impulsive, therefore it is only the first leg down. We should bounce to 208 sometimes next week but chances we'll go down again. 240 can happen but not without sufficient basing. If you feel hairy about it, you can close the butterfly call to recoup some premium and use that to roll the 192.5P down to 187.5 or something like that.

I didn't open these yesterday, following along as a paper trade to learn from

Thanks for sharing this insight.

 

[Jim Holder]

no, not anymore. Not next week. The structure of the reversal from 218 is impulsive, therefore it is only the first leg down. We should bounce to 208 sometimes next week but chances are we'll go down again. 240 can happen but not without sufficient basing. If you feel hairy about it, you can close the butterfly call to recoup some premium and use that to roll the 192.5P down to 187.5 or something like that.

I’m holding my 8x 192.50 -P for next Friday 2/24/23. My thinking is it’s a long 3-day weekend ahead, time for emotions to cool and reset, plus next week is a short trading week, and Tesla Investor’s Day is only a week away from there, thus IMO we may hover around 200 and hopefully poke above it to 210-215 as we lead into the event (I pulled these numbers out of my hat).

I’d love a chance to shed some shares I’m holding from Thursday @ $216 (my stop wasn’t set right leading into the fall on Thursday). Meantime I’m selling weekly covered calls against them.

 

[jeewee3000]

Cost basis would be $186.50!

Nice position.

I won't be in front of my terminal till after lunch.....

Cost basis would be 180.5

 

[SebastienBonny]

Premiums for next week seem low, but stock market closed on Monday!

 

[dl003]

This area I think will be the magnet for the next 4 weeks. A battleground of sort. Not just because it is the number 200, but it's the last old support trendline to be broken late last year. This is an important psychological trendline. If we can successfully reclaim it, it will send the message that every concern and every piece of FUD that sent TSLA crashing below this line is invalid and the stock is now back in its old self.

 

[SebastienBonny]

Sold 225CC for next Friday @1.50.
Didn’t think we’d have a nice rise like this, but very welcome.

 

[UltradoomY]

Just opened a lot (for me) Synthetics for next week

Sell to Open $200P
Buy to Open $200C
Net credit - $1 each

Up on these already almost 35% - if it gets over 40% I will take the easy close for sushi money and look to re-enter on Tuesday.

I'm digging these Synthetics more than the butterfly. My risk on appetite is higher for sold puts than calls in the short term and don't mind the extra upside from owning ATM calls.

Edit - Closed out a ratio - 1 call at $12 each to close out 3 Puts at $3.95 each

Now free calls for next week at $200!