Wiki Selling TSLA Options - Be the House

[BornToFly]

Wouldn't you know it. The SP climbed just enough to trigger my buy stop loss order on the shares I sold yesterday, and then went back down while I was clearing snow...

All the TA guys are saying TSLA goes lower, even though everything from Q1 delivery numbers, to Investor Day, to the new factory in Mexico breaking ground soon, all say the SP should be much higher than it is. Trading becomes more difficult when there is a disconnect from fundamentals and the SP, because you never know when the next rally will come.

 

[dl003]

All the TA guys you say? Well when everyone says the same thing I have to have some doubt now.

I don't really see why it's so hard to believe TSLA will go down, while at the same time knowing how much more it should be worth. We ran from 102 to 218 - 116 point zipper. 115% gain in 2 months. Since then, we have only corrected 38 points, or 32% of the rally. That is nothing. TSLA is still firmly in the super bullish zone. It can and will (IMO) go down and still be bullish. Remember: not all people who bought from 102 to 218 were long term investors. In fact, I'd wager the ones buying after ER consisted mainly of traders. Traders don't hold despite how strong the fundamentals are. They will sell when they have to. That will take the stock down.

The problem with thinking TSLA should go up because the company is doing so well is in assuming everyone who bought was a long term investors and the fundamentals gave them conviction. Traders rule this market, at least for now.

 

[Max Plaid]

All the TA guys you say? Well when everyone says the same thing I have to have some doubt now.

I don't really see why it's so hard to believe TSLA will go down, while at the same time knowing how much more it should be worth. We ran from 102 to 218 - 116 point zipper. 115% gain in 2 months. Since then, we have only corrected 38 points, or 32% of the rally. That is nothing. TSLA is still firmly in the super bullish zone. It can and will (IMO) go down and still be bullish. Remember: not all people who bought from 102 to 218 were long term investors. In fact, I'd wager the ones buying after ER consisted mainly of traders. Traders don't hold despite how strong the fundamentals are. They will sell when they have to. That will take the stock down.

The problem with thinking TSLA should go up because the company is doing so well is in assuming everyone who bought was a long term investors and the fundamentals gave them conviction. Traders rule this market, at least for now.

The problem here is that the drop from 200 to 100 was nonsense in the first place... I don't see it as a 115% rally, but rather an unwarranted 50% drop

 

[dl003]

The problem here is that the drop from 200 to 100 was nonsense in the first place... I don't see it as a 115% rally, but rather an unwarranted 50% drop

If you zoom out some more, it's a 75% drop. Crazy, right? Keep zooming out and it becomes a 75% correction after a 2500% rally. What?
People have vastly different opinions TSLA. To a lot of people, TSLA is the product of irresponsibly injected liquidity, both fundamentally and fiscally. Fundamentally, borrowing money was easy so people bought and bid up car prices like no tomorrow. Fiscally, liquidity injection blew up PE on already inflated EPS. I'm not saying they're right, but there are a lot of them. I mean a lot. The proof is in the pudding: TSLA rallied 2500% in 2 years. If so many people believed in the company, it wouldn't have rallied 2500% after spending 6 years in limbo. If the market believed in TSLA, it would have bought it along the way and we wouldn't have entered 2020 at $26 a piece. No, we would have been higher. In reality, what happened was only a small group of people (us) believed and held our shares. Everyone else was chasing after the fact. You can argue that after multiple blockbuster ER's, the market got smarter about Tesla. No, it really didn't. The market has existed for hundred of years and it was wrong about TSLA for a long time. 2 great years wouldnt change anything.

What I'm trying to say is: to the market, TSLA is again a prove-it stock. $100 was unwarranted, definitely. But so was 300, considering the market we were in. If SP 500 was filled with smart and high conviction holders and TSLA still traded $415, then ok, but TSLA traded 415 when NKLA was 90. For a stock that has to prove that:

a/ It can sell highly priced cars during a recession, and
b/ It can generate profit margin and growth sufficient to warrant a 30-50 PE during a period of massive liquidity contraction,

maybe this 160-180 area is not crazy at all. If SPY revisits 2022 low, why can't TSLA go down to 160? Same thing if Q1 P&D is a miss. If we're right and the market is wrong again, we can accumulate shares down here for massive gains in a couple of years. Isn't that how it has always played out? Just because 2020 and 2021 happened doesn't mean TSLA is a different stock now.

 

[vikings123]

One has to assume this is the end of it. It's not. 160 comes later, IMO. There is no way we reach 160 before P&D. Won't even break 176.

I believe the same but when I take off my TSLA bull hat I'm feeling like it's possible we break before P&D. Just look at what happened in December for evidence. Also remember that tomorrow is a great opportunity for the bears to reverse squeeze with 0DTE puts.

 

[EVNow]

If we look at last one year ... it is just the Dec-Jan period that stands out. We all know various factors that led to TSLA underperforming in December and a lot of those factors have been addressed which led to Jan rally. Indeed $200 looks like a decent price given the market conditions.

TSLA will have to do something market doesn't expect for the SP to bounce up.

 

[intelligator]

Interesting how yesterday the market tested 180.95 several times and broke through at about 12:50pm, went down then surfaced above at 2pm for an hour. Today we tested that same 180.95 at 10:24, 11:30 or so, then fell through at noon.

 

[adiggs]

Share price around 178 - I've rolled my remaining 175/165 BPS for tomorrow expiration. I'm comfortable with the idea that we'll be >175 tomorrow, but I'm not comfortable with waiting to be proven right and then get proven wrong

Three different batches of rolls. I've now got a 2x roll into next week 160/150s -- the position I like the best. I've also rolled to 170/160s for next week, and 165/155s for the week after. All with credits of decent magnitude - the strike improvement also carries a decent weekly income built in. Just not enough to buy another strike improvement (I'm sticking with the 5's for volume). If there had been enough credit to buy another $5 strike improvement I would have taken that over the income.

My rationale on rolls are that I'm taking a loss to get into a new position that has the potential to recover all of the loss and then as much of the credit as I'd like (or at least get back the loss so the overall is neutral). As such I focus on strike improvement rather than income. Income is for weeks that just win, and don't need to roll.

If we continue moving down I will roll again when still OTM as we are now. At the moment I'd guess that the next roll will be out to March 31 for any of these positions; the roll after that might be the April monthly.

 

[dl003]

I believe the same but when I take off my TSLA bull hat I'm feeling like it's possible we break before P&D. Just look at what happened in December for evidence. Also remember that tomorrow is a great opportunity for the bears to reverse squeeze with 0DTE puts.

The difference is, right now we are in a weekly uptrend, the first once since November 2022. During December of last year, we were still in a weekly downtrend so really deep pullbacks were always possible. Now, a weekly uptrend, to me, means that absent bad fundamental news, the trend won't be challenged. In order for the weekly uptrend to be challenged, daily uptrend has to be broken first. That's why I believe the daily broken at 176 can be challenged, but not broken before P&D. If it's broken, then it means the market is very bearish toward TSLA and I can almost guarantee 125 will be met at some point, unless P&D is a blockbuster.

 

[BornToFly]

Down 22% in 3 weeks on the news that Tesla is cutting costs 50%, building a new factory this year, and will make money hand over fist while everyone else goes bankrupt. Awesome.

 

[CHGolferJim]

Executed another buy-write in Roth to replace shares I let assign 2/10 at $190:

• bought at $178.44
• sto 17Mar$180 CC at $5.60 (had planned 1DTE but difference >$4)
• 8-day profit of $7.16 if SP > $180 on 3/17
• rollable

 

[juanmedina]

anyone buying puts?

 

[Cherry Wine]

anyone buying puts?

I bought them at open. Now I'm thinking about buying calls in case we get a cold jobs number.

 

[EVNow]

That's why I believe the daily broken at 176 can be challenged, but not broken before P&D. If it's broken, then it means the market is very bearish toward TSLA and I can almost guarantee 125 will be met at some point, unless P&D is a blockbuster.

176 is being challenged now !

BTW, I should note TA folks I follow on YouTube don't attach much significance to 176. For one of them the line was at 187 and the other at 190.

 

[vikings123]

anyone buying puts?

I bought a bunch this morning when we were in the 183 range..bought weekly 175 puts for .51 it was worth it after listening to the levels Dan was giving.

I also just bought some ITM puts earlier but if it closes below 178 I might pick up some more lottos for tomorrow. I would suggest that it might be a prudent idea to close any CSPs or BPSs even if you are in the loss.

 

[vikings123]

The difference is, right now we are in a weekly uptrend, the first once since November 2022. During December of last year, we were still in a weekly downtrend so really deep pullbacks were always possible. Now, a weekly uptrend, to me, means that absent bad fundamental news, the trend won't be challenged. In order for the weekly uptrend to be challenged, daily uptrend has to be broken first. That's why I believe the daily broken at 176 can be challenged, but not broken before P&D. If it's broken, then it means the market is very bearish toward TSLA and I can almost guarantee 125 will be met at some point, unless P&D is a blockbuster.

Not anymore sir, let's see how we close here but if we close around this level(175/176) we are in trouble for tomorrow, forget about next week.

 

[SpeedyEddy]

Not to paint you as an oracle here or anything but how long could that possibly last - a big flush that is?
I do dangerous things and sometimes it comes through
What do you have for reasoning that we (not the market in general) would tank down to $160?
I was reacting to what @dl003 posted about 160-210-120 and I myself think about closing at least the 143-150 gap-up and maybe even the other two below up until 110. Which is a good thing for the stock because that takes away any doubt about a later gap-filling dip, TA-wise. The rule is that all gap-ups will fill later, so, being a $TSLA stock and Tesla brand fanboy better fill ASAP. So I really hope it will happen. The only fill before that never happened was 97-100, which I was waiting for 2 months ago. Maybe even that will be filled soon and then we will see the starship leave forever, because of tremendous fundamentals (as I stated before, more: Tesla will become the most valuable company ever, in a few years.)
Is Tesla not going to have a record Q? Yes but not grossmargin %-wise and after multiple compression, which not even is completed, markets earningsdrop will kick in (not for $TSLA but it will suffer from the macro) Is Tesla not going to make a record profit.. again? YES!!

It's a short time till the P&D report now.
Not too confident it will be mind-blowing (which is needed to turn against the falling market (after Friday)
Are you betting on Powell raising rates - .50% ? and see that as a catalyst for the entire market tanking - thus bringing TSLA down?
That is important indeed and I must say I went deeper into daily SPY options and-after having found out it makes markets more or less freeze during the day, I have had a new insight that a sudden collapse due to bad numbers or a black swan the marketmakers possibly will not be quick enough to cover the P’s spiking, Turning a big loss into the worlds greatest one-day crash ever seen. That will be the end of daily options. Chances of this ever happening are far below 20%, but you will remember this post. A few days ago it looked like that would set in and market makers lost a lot, making them be more careful the day after.
Not being a fussy pants here - just trying to see a counter view point. I think we are all here to help. That is why I bring the mistakes that all of us made (me too!!!) end of last year into memory! Let us not make the same -P-rolling mistakes. -C when we go down clearly

I am positioning for consolidation around this level $180-$200 until the P&D report let's us know how big this Quarter is - and then the earnings report to confirm another record profit. why! I don’t see why

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[dl003]

Not anymore sir, let's see how we close here but if we close around this level(175/176) we are in trouble for tomorrow, forget about next week.

it's a daily support so it has to close the day below it. Intraday violation doesn't mean broken to me.

 

[juanmedina]

Two weeks ago we were going to $300 and now to low $100's... I can't deal with this lol . I need a bull market.

 

[adiggs]

Down 22% in 3 weeks on the news that Tesla is cutting costs 50%, building a new factory this year, and will make money hand over fist while everyone else goes bankrupt. Awesome.

I've shared this thought many times over the last 10 years. In the last 2 years though, I've learned that I really do need two different thinking caps, and I need to be really conscious of which one I am wearing at any given moment, and that I'm using to make my decisions.

My first priority cap, and the one that provides me invaluable context, is my long term buy and hold investor cap. This is the one that cares about vision, strategy, and execution and does not care about share price. This cap is confident that the share price will match actual enterprise value off and on and will definitely bubble to the surface sooner or later. That could be 5 months or 5 years - whatever it is, it'll happen.

The other cap is my short term trading cap. This cap is concerned with short term company news, macro news, economy, inflation, technical analysis, and such like. The other cap provides some context, but the connection between vision / strategy / execution is effectively zero. Or at least I need to treat it as zero, because there are enough other traders that treat it as zero.


The overlap in these two arrives in the long dated options. Long dated are 2+ years at open, not the 6-12 month options. The price can be irrational for an entire year, or at least most of a year, and that's why I put those 6-12 month options into the short term bucket.