Wiki Selling TSLA Options - Be the House

[Jim Holder]

Thanks @elasalle for the idea. Followed, just a bit, STO here 10x -C260 1/2025 @$8.65 as insurance. Plan to buy it back on any dip/weakness/crash or roll in or out near expiry. One reason longer-dated expiries can work well sometimes is the volatility gives several chances to moves things around. So even if TSLA does $237, it'll retrace down anyway, and if TSLA does the $140 again they'll be ripe to close. By the time it gets to $260 (if ever) a lot of water would have passed under the bridge.


EDIT Added the visual representation:

 

[Jim Holder]

5/17 $170-175 appears to be locus of magnet

 

[Jim Holder]

Next week 5/24 looks like a chance for some bullish moves $180-$190 if market participates.
+GEX is currently tilted/weighted to the right of $180 up to $190.
Note these postures have changed in the past and are not a firm prediction.

 

[Max Plaid]

I have no near terms covered calls for income open, having closed all of them the past couple weeks as we bled down, some stupidly timed (i.e., BTC -C170 5/17 while up in the 180's fearing a continued pump and could have closed it out today for 80% less cost). Gave away all March and April scalp gains on similar duds . Cost of playing these games. At least it didn't eat into "real" money and use margin. I need to learn to let positions ride closer to expiration before emotionally BTC too soon (though that doesn't always work either...).

I'm leery to STO new CC's down here in the low 170's since the TA boys are saying be careful and are dangling the $23x carrot as soon as June (though last time similar predictions of moving up and off $220 saw us tank below $200 instead, so there's that).

Positions like -C215 7/10 is currently paying less than half it was last week ($3.00 vs $8.50).

Practically speaking, I am currently mostly flat with just:
a) Shares
b) 10x -C240 12/2024 @$4.50 (STO before ER in the low $140's). Will just let them ride for now.
c) 12x -C230 1/2025 @$8.25 (STO before ER in the low $140's). Will just let them ride for now.
c) 5x +C150 12/2025 LEAP @$109 (now $61 -44%)
d) 15x -P300 6/2026 LEAP @$115 (now $133 -15%)

My main worry is the 15x -P300 6/6026 I'm carrying if TSLA crashes <$130 (extrinsic $0.00). Would you moves this somewhere else now, or wait it out and roll/wheel if it gets assigned (will eat margin when assigned).

Yeah, been tricky trading in recent weeks, you make one move and get wrong-footed, then do the opposite only for it to happen again

I realise the TA and the "market forces" might want the stock to pop, but when you look at the state of play right now, Tesla is in a terrible state compared to where we thought we'd be, so although it might happen, it would be totally against all logic, but yeah, we saw that after earnings too...

For your -p300's, again it's guessing ahead of time, you can hedge them with Delta-neutral +p's so that any movement in one is matched by the other, but that won't stop an early assignment if it comes... the way around that is to roll them down, you know I would split the risk into a straddle, if you have the free contracts. You cold go to Dec 2026 -240's, for example

But that's a long, long expiry to manage...

I have Dec -190's, but the puts are OK down to $100 and if I can keep my +p150's free with such drop then I wouldn't care too much about 45x -p190's with a $100 cost basis, if they got assigned I would just resell...

My plan for those straddles is to let them rot for a bit, maybe if there's a big move then I'll rebut the one side and sell on the other - for example both sides of the trade brought in about the same, $45, if the SP pops then the puts will reduce, can buy the back and sell less calls to preserve capital... then when the SP reverses, swap it back...

If not, then I reckon the SP will quite likely be trading around $190 end of next year and the whole lot expire... if not, then once we get close and Theta kicks, I'll start to roll the straddle out into strangles, while rolling my +c200's to cover them

And in the meantime I'll also consider to start closing them out... I have a cash goal, once I hit that I can use weekly premiums to a) roll +c LEAPS as proxy shares, b) buy back the Dec -190's gradually

Etc...

 

[deerfield]

at the rate this is going, it does look like my SMCI cost basis 901.66 will quickly reduce to 850 and i am finally out, which means DITM CC + Stock Repair is a super deadly combination where income is virtually guaranteed and there is no possibility of capital loss (unless SMCI goes bankrupt)

what did i learn?

• when stock fell from 900 to 700, there was still about $250/wk OTM income while waiting for sp to rise; this worst-case scenario in itself is already very good (ie getting paid to wait it out)
• when stock traded sideways, there was Stock Repair income while waiting for sp to rise; ~$1000/wk per contract
• when stock rose to 850, i keep $812 for my trouble, and the Wheel round 2 starts again
• in other words, there is income down or sideways or up, and covered call means there is no chance of blowing up acct

FOUR YEARS i wasted on spreads when i could have been doing this

View attachment 1047373
View attachment 1047375

What's the DTE when you enter these? Do you still stick to your 2-3 DTE for SMCI? Currently looking at 5/24, -C830 BuyWrite is paying $12.

 

[Jim Holder]

For your -p300's I would split the risk into a straddle, if you have the free contracts. You could go to Dec 2026 -240's, for example

Thanks.

Is the idea to use the premium from the -C to buy back some of the -P or just keep them both on, and one side wins at some point and deal with the other?

I agree 12/2026 is quite far away to deal with. I liked our 9/2024 straddle we had going earlier (-C closed for nice profit and -P resulted in the roll to the 15x-P300 6/26). Too close -C may not be wise currently as bearish as many of us may currently feel (fear the contrarian move).

 

[Yoona]

What's the DTE when you enter these? Do you still stick to your 2-3 DTE for SMCI? Currently looking at 5/24, -C830 BuyWrite is paying $12.

for spreads, 2-3DTE

but i moved to DITM CC so 7dte is ok

$12 is good enough for me

 

[Max Plaid]

Thanks.

Is the idea to use the premium from the -C to buy back some of the -P or just keep them both on, and one side wins at some point and deal with the other?

I agree 12/2026 is quite far away to deal with. I liked our 9/2024 straddle we had going earlier (-C closed for nice profit and -P resulted in the roll to the 15x-P300 6/26). Too close -C may not be wise currently as bearish as many of us may currently feel (fear the contrarian move).

Depends on what you're most comfortable with really, $240 is also an SP you could imagine being in play end 2026, so you could just leave them to decay... of course if Elon quits and Q2 P&D is $200 then nothing will save those puts, other than some Delta neutral +p's, but that would be quite expensive, I imagine...? I'm not great at those sorts of things...

Maybe you could do the reverse of what @Yoona was proposing as the stock rescue strategy, maybe there's a put rescue strategy method too...?

Other thing, just buy them back with weekly premiums - if you can bring in $13k per week, buy one back, I like to do that too, but sometimes feel it's a waste of money when there's a reasonable chance they'll end up expired anyway

 

[Max Plaid]

BTC 100x 5/17 -p180 @$4.9 (net +$3.2)

Still holding 5/17 100x -c180 -> looking to see if I can get to a -p170/-c180 strangle for next week break-even, would be better than a straddle...

 

[Jim Holder]

Below 179-180 TSLA still weak and susceptible to more downside:

 

[CHGolferJim]

BTC 100x 5/17 -p180 @$4.9 (net +$3.2)

Still holding 5/17 100x -c180 -> looking to see if I can get to a -p170/-c180 strangle for next week break-even, would be better than a straddle...

When I have a position likely to expire like your -c180, I like to identify roll candidates then monitor net credits for several days —> roll Fri, if necessary, otherwise holding to expiration and selling on Monday move up is obviously preferable, when that happens.

 

[Jim Holder]

5-Day: 173.37
20-Day: 171.45
50-Day: 170.83
100-Day: 189.57
200-Day: 215.54

 

[thenewguy1979]

Look like NVDA is consolidating for a big move. Question is it going be up or down?
Breaking trend - SMCI is in red while NVDA is green (for now).

Will it hit ATH - 970 plus EOW?

 

[Jim Holder]

@tivoboy in your view are SPY +P500 6/21 worthwhile to get up here (it's down to $1/ea) or not yet?

FWIW EW SPX update says: "Until the SPX gets back down below $5265 SPX, there is no bearish potential to really focus upon YET. This can still keep us up here and try to push towards $5350 over the coming days."

 

[OrthoSurg]

 

[Jim Holder]

@Yoona

I forgot what you taught us earlier, does the A usually imply bought and B sold?
These are some major $$$ on Puts for June 21. I've seen many like these hit over the past several days. If some HF knows the vote or knows that it won't matter, may be loading up for a massive rally or the converse?

 

[Max Plaid]

When I have a position likely to expire like your -c180, I like to identify roll candidates then monitor net credits for several days —> roll Fri, if necessary, otherwise holding to expiration and selling on Monday move up is obviously preferable, when that happens.

Yeah Jim, I was thinking the same, going to sell the -p170 today, probably, but no rush for the -c180's, especially as there was still quite some extrinsic left - as it happens that has now dropped to 20c, but tomorrow it will be pennies, so may as well wait

 

[tivoboy]

@Yoona

I forgot what you taught us earlier, does the A usually imply bought and B sold?
These are some major $$$ on Puts for June 21. I've seen many like these hit over the past several days. If some HF knows the vote or knows that it won't matter, may be loading up for a massive rally or the converse?


View attachment 1047824

I thought it was “at the Bid, or at the Ask”. Directionally, Ask, in a stronger uptrend should be the higher mark…depending on the spread.

 

[ChiefRollo]

@Yoona

I forgot what you taught us earlier, does the A usually imply bought and B sold?
These are some major $$$ on Puts for June 21. I've seen many like these hit over the past several days. If some HF knows the vote or knows that it won't matter, may be loading up for a massive rally or the converse?


View attachment 1047824

Yes, A and B are ask (buy) and bid (sell); on put, it correlates to bearish and bullish as indicated on your column 6.

 

[CHGolferJim]

Yeah Jim, I was thinking the same, going to sell the -p170 today, probably, but no rush for the -c180's, especially as there was still quite some extrinsic left - as it happens that has now dropped to 20c, but tomorrow it will be pennies, so may as well wait

Often the roll credit will increase more than the remaining extrinsic (blood to be squeezed from the stone), but that can be less than the premium increase Mon vs. Fri.