Wiki Selling TSLA Options - Be the House

[thenewguy1979]

• #447,881 posted on other thread by papafox

An unusual trading pattern has occurred with the purchase of huge quantities (over 200K contracts traded each day) on March 12 and 13, 2024, of far-in-the-money put options at the TSLA 220 and 230 strike prices. I assume this strategy is ongoing Mar 14 as well. Those puts are being purchased and then at least 90% of them sold each day. You can confirm the daily selling of these puts by checking the open interest in TSLA options each morning

That must be Jim scalping

 

[thenewguy1979]

Just an observation. I maybe wrong and that could be highly likely.

NVDA been making gain every week. Based on this trend if still intact we should be green for NVDA tomorrow.
Perhaps Jenson can help shared some love with TLSA so we can get that DCB. Sure many are waiting to offload and close any hot position.

 

[Jim Holder]

Jim - if that -P250 is a CSP, there should be options to roll available to increase the extrinsic (and down to lower the margin) - right?

edit - just looked rolling to June 26 gets 10 extrinsic but ties $ up much longer. that far out only can go to 240 for credit, or 230 for debit

Yeh, keeping my eyes on it. If we end up in the $150's and extrinsic bleeds out I may roll. Otherwise holding onto them and will either BTC at a better spot or wait it out. Thanks for thinking about me

 

[Jim Holder]

i would normally call this out as st*pid and irresponsible, but judging from recent Q4 history there may be a point; -22% drop from here is ~125.

we just had 2nd-worst P&D to Earnings range, and 4 consecutive red quarters from P&D
View attachment 1028011

A counter might be "priced in" by now and time for some relief. But what do I know

 

[kabin]

• #447,881 posted on other thread by papafox

An unusual trading pattern has occurred with the purchase of huge quantities (over 200K contracts traded each day) on March 12 and 13, 2024, of far-in-the-money put options at the TSLA 220 and 230 strike prices. I assume this strategy is ongoing Mar 14 as well. Those puts are being purchased and then at least 90% of them sold each day. You can confirm the daily selling of these puts by checking the open interest in TSLA options each morning

Those are full -100 delta options. I imagine a levered-up TSLA bear ETF would want to do exactly that. It's finally their day in the sun.

 

[thenewguy1979]

Off Topic but for those looking at NVDA.

Big event next week that could pump the stock.

GTC 2024: #1 AI Conference

Register now. Streamed online. March 18-21, 2024.

www.nvidia.com

 

[CHGolferJim]

I am planning on buying LEAPS, June 2026 250strike,
at 150 SP cost $25
assuming a SP double to 300 before expiration the LEAPS value would be $120
so a 3.8x v SP 1x

I am missing something besides the obvious & that being if the SP does not recover before Jun 2026

4.8x vs. 2.0x? What is break-even on LEAPs vs. Shares, about SP $220?

 

[mongo]

4.8x vs. 2.0x? What is break-even on LEAPs vs. Shares, about SP $220?

The $120 number is wrong. That position is share parity at $300 at expiration.
optionsprofitcalculator.com/
can show you call vs dollar equivalent share returns.

 

[CHGolferJim]

Honestly torn if to sell my longs here, even half. Fear is of a rebound, even a DCB after so many days down, which will be quite expensive if I miss it. Likewise holding the longs and we fall more drags my portfolio net liq down and threatens a maintenance call to cover -P250 9/20 which have about $1 left extrinsic around here.

Anyone sell their longs (and/or liquidate long calls) around here?

Also considering selling half my shares and starting to rebuy in April, meant to do it around $200, but as a committed HODLer have been dithering through the daily bleed. BUT, RSI has gone from 36 Wednesday at $169.50 to 31.2 today ($162-$169). Not sure what time of day the daily RSI is calculated, i.e., when today’s SP drop is reflected, but RSI could be <30 tomorrow. Currently have a limit order in to sell at $168, but if it doesn’t hit, I may hold. New territory for me re the analytics.

 

[CHGolferJim]

That must be Jim scalping

Discussed in Papafox’s thread.

 

[Jim Holder]

 

[CHGolferJim]

The $120 number is wrong. That position is share parity at $300 at expiration.
optionsprofitcalculator.com/
can show you call vs dollar equivalent share returns.

Is that assuming IV is the same on dates of LEAP buys and sales? Wouldn’t it be reasonable to expect higher IV than now (with SP doubled and possibly on the rise), or would IV at time of sale more depend on SP movement during the few months prior to reaching $300?

 

[mongo]

Is that assuming IV is the same on dates of LEAP buys and sales? Wouldn’t it be reasonable to expect higher IV than now (with SP doubled and possibly on the rise), or would IV at time of sale more depend on SP movement during the few months prior to reaching $300?

? opc has the option to change IV for the scenario.

 

[Max Plaid]

I've got a mess to clean up and I'd like to see what holes people can poke in this logic I've applied.

I flip-rolled some -200/+170p put spreads expiring next week, out to -145/+175c call spreads expiring in April. Yes - DITM on one side, to DITM on the other side. I rarely roll for a debit but I did in this case. I then added some -135/+105p put spreads for the same expiration date for a small credit - about 1/2 of the debit paid on the call side.

My thinking is that I can form the other side of the IC for effectively zero risk, with the most likely outcome being that really low put spread expires worthless and gets me a small credit to help pay for the call spread, while the call spread continues being the problem that it is right now.

The best outcome is the share price drops and is between 135 and 145 expiration week, and both sides can be exited for a minimal total loss.

If the share price goes down a LOT then I've transformed that -200/+170p DITM put spread into a -135/+105 put spread that needs management from there.

If the share price rebounds from here and goes up, then I've turned a near max loss into a nearer max loss, and picked up a small credit to help offset some of that additional loss.


Thoughts?

Given that it's -c145's and -p135's, isn't $140 at expiration the best?

 

[mongo]

Given that it's -c145's and -p135's, isn't $140 at expiration the best?

Anything under 145 and the call expires worthless/ unexecuted
Anything above 135 and the put expires worthless

 

[Discoducky]

Wrote $160 calls for tomorrow based on this volume. Wondering how well this will age?

 

[ChiefRollo]

Honestly torn if to sell my longs here, even half. Fear is of a rebound, even a DCB after so many days down, which will be quite expensive if I miss it. Likewise holding the longs and we fall more drags my portfolio net liq down and threatens a maintenance call to cover -P250 9/20 which have about $1 left extrinsic around here.

Anyone sell their longs (and/or liquidate long calls) around here?

I’m in the same boat at half of your share…trying to catch a DCB to liquidate. Sucks to think I have to sell them at such a loss.

 

[kabin]

Yowza!

 

[ChiefRollo]

At a societal level this kind of deflation is a huge positive. Cars will need a smaller and smaller fraction of the family budget over time.

But in the short term while the cost to build these things is still plummeting, and for individuals that expected the $67k residual value and now have the $32k residual value, they have powerful deflationary forces keeping them out of the market and keeping them in their current car. Or at least that's what I see.


H'mm - lots and lots of this stuff going on. I think we need a different thread, maybe already in existence, to work through this sort of 2024 / 2025 trends and share price impact.

As Tesla vehicles go, I am trading in my 2018 S for a tax-edition X with FUSC & FSD transfer (picking it up this coming Monday). Yes, the value of my S now is quite a bit lower than it was 18 months ago. But the difference in price between it and the new X has never been smaller.

Elon wants to get people into EV’s; he obviously cares less about helping people getting out of them (resale value). If it’s a trade-in for a new Tesla, there isn’t a real loss of value.

 

[Jim Holder]

Piling on:

https://twitter.com/x/status/1768323174033428483