Wiki Selling TSLA Options - Be the House

[adiggs]

Took the "L" on my 10x 780/830 bear call spreads at a $6.5k loss. More than made up for by other gains this week, and I have zero faith in being able to close them at a better price between now and Friday, even though it's certainly possible. Well worth the peace of mind, and I would rather not get caught up in having to roll them in front of a potential freight train of a bull run.

I'm a big fan of the "peace of mind" / "stomach acid" / "sleep at night" test as a crucial component of investment decision making. Rightly or wrongly these are at least instinctual level measures of risk. And an important component of this investing approach is our in-depth knowledge of the company. Not all of it can be quantified in a conscious way - it just comes from spending WAY too much time reading TMC forums, driving our cars, and watching videos.

EDIT: But is it really way too much time, if it's a part time activity and it is replacing or exceeding paycheck income? Maybe it's just the right amount of time! I've got 13 hours in Huge (Model X) tomorrow - learning more about my investment, and hopefully building up a safe driving history that'll get me into the City NOA beta sooner than later. More investment research.

 

[UltradoomY]

Anyone taken a look at the max pain chart for next week 10/08 yet?
Weird that max pain is listed at $725.... because there is a solid put wall at $720 of 55k puts but also a call wall at $700 of almost 32k calls....
Just weird IMO.
I am looking to open a BPS for next week sometime this afternoon or tomorrow morning and wondering where to place the sold strike - I was thinking $735 but that gave me pause.
Any "not advice" is welcome.

 

[bkp_duke]

Anyone taken a look at the max pain chart for next week 10/08 yet?
Weird that max pain is listed at $725.... because there is a solid put wall at $720 of 55k puts but also a call wall at $700 of almost 32k calls....
Just weird IMO.
I am looking to open a BPS for next week sometime this afternoon or tomorrow morning and wondering where to place the sold strike - I was thinking $735 but that gave me pause.
Any "not advice" is welcome.

Probably the 23k calls at $800 skewing it upward.

Personally, if I can close out my positions on Friday, I don't intend to open anything till late Mon or early Tues. And then it will just be quick, I don't want to hold any calls or puts for the 10/7 shareholder meeting.

 

[cbh03]

Anyone taken a look at the max pain chart for next week 10/08 yet?
Weird that max pain is listed at $725.... because there is a solid put wall at $720 of 55k puts but also a call wall at $700 of almost 32k calls....
Just weird IMO.
I am looking to open a BPS for next week sometime this afternoon or tomorrow morning and wondering where to place the sold strike - I was thinking $735 but that gave me pause.
Any "not advice" is welcome.

I am planning on opening some BPS on Friday, hoping for an increase in IV prior to the P&D numbers release. I will likely open a few less BPS and/or open at a more conservative strike than I typically do (maybe a few strikes behind the $720 put wall) just to play it safe. I will likely add more next week once the dust settles from the P&D and we have more insight on where the SP will likely close on 10/8.

Edit: no CC sold for next week and I'm unlikely to sell any

 

[corduroy]

STO BPS 5x 10/8 690/590 $6.5 I'm loving these premiums.

 

[juanmedina]

I think I am getting addicted to BPS

 

[Drezil]

Just sold 10x 815lcc for friday @2.65. Wort case i roll them 1 week to 840 or so & then part with my 700$ underlying call expiring next friday

Have another 10x @4 already open if we do spike again.. if they don't fill .. well.. for me.. means i can keep the other 2.6k for 2.5 days of hodling

The dip today was too enticing.

closed 50% after they hit 50% with order to reopen on a spike tomorrow. I try to learn that .. take 50% gains on 50% of short positions.. & reopen for another swing. Works more often than not & can be automated with "attach order" to do a bit of AFK-Trading with TWS

 

[InTheShadows]

Early this morning (30 to 60 minutes into trading?) I had the opportunity to close my BPS for ~45% gains and I strongly considering doing so (shares roughly $5 in the green?). In fact I'd say that most of the time that is exactly what I'd do (think close --> do close). I did close some to make the negative margin balances a lot less negative

In this case I decided I'm far enough OTM (730 strike) and I plan to close tomorrow either way to prepare to open on Friday that I decided to let 'em run. The reason for that choice is that I think time decay is strongly in my favor this close to expiration, especially $40+ OTM and I'll have a significantly more profitable close opportunity tomorrow.

Yea time decay sure is slow this week. The headwinds of IV going up is pretty rough. Guessing we will see gamma squeeze start tomorrow like would normally be on Friday. Usually over half of my positions auto close with their targets on Wednesday. I have only had one close so far and the rest of them are still 20-30% away from their targets.

With the stock appreciation earlier this week, I thought most of my positions would have closed late Tuesday or early this morning.

I might adjust their targets to 90% now. My reasoning is that I won’t be opening new positions until Friday afternoon to try and maximize IV crush. The only way this would fail is if by some miracle Tesla announces p&d on Friday. It has never happened before and I even wonder if they can have a solid number because of paperwork lag.

I am planning on 10% of my bps for next week being I dare you spreads with the short leg at a delta of -35. The rest will be around my norm of 1 standard deviation to -20.

 

[InTheShadows]

I don't want to hold any calls or puts for the 10/7 shareholder meeting.

Do you mean long, short, or neither?

 

[adiggs]

Anyone taken a look at the max pain chart for next week 10/08 yet?
Weird that max pain is listed at $725.... because there is a solid put wall at $720 of 55k puts but also a call wall at $700 of almost 32k calls....
Just weird IMO.
I am looking to open a BPS for next week sometime this afternoon or tomorrow morning and wondering where to place the sold strike - I was thinking $735 but that gave me pause.
Any "not advice" is welcome.

My not-advice / plan; I want to be opening BPS on Friday, possibly tomorrow. Most likely is a close of this week position tomorrow, and open of next week position on Friday. I want the position(s) open over the weekend for whenever P&D gets announced -- I'm going for a buy-the-rumor, sell-the-news dynamic.

I've been doing 730 strike puts and first guess is that's what I'll be doing for the 10/8 position as well. Not a very systematic approach to that strike - it's reasonably far OTM, good premium, and its close enough to the solid share support I see at 700 that I'm confident I can roll down or just hold the line rolling straight out for a week or two while the shares come back (should that become necessary).


I've begun thinking about also opening call spreads to go with the put spreads - IV on Friday might even by high enough to put something like that in play - probably closer to the 850 strike for call spreads, and the 800-820 strike for lcc's.

 

[bkp_duke]

Do you mean long, short, or neither?

Neither. I don't have a lot of "hard data" to put something specific on it, but I feel that the spring is getting pretty tightly wound, and we are due for a pretty big pop upwards. Things that might cause the spring to go are P+D beating even robust expectations, announcement that either Berlin or Austin are going live with production any day, or 4680 problems are "solved" and Tesla is about to become the largest battery manufacturer on the planet.

My not advice, just musings I've had for the past few weeks. I do regret where I placed the top end of my Iron Condor (695/720 800/825). It would take very little in the next two days to blow the top off 800.

 

[corduroy]

I've begun thinking about also opening call spreads to go with the put spreads - IV on Friday might even by high enough to put something like that in play - probably closer to the 850 strike for call spreads, and the 800-820 strike for lcc's.

You've talked about $100-$200 wide spreads with the puts, what width are you thinking about with calls?

 

[adiggs]

You've talked about $100-$200 wide spreads with the puts, what width are you thinking about with calls?

I would match the put spread width. When I've legged into an IC this way previously, Fidelity wouldn't recognize the call spread as an IC with the put spread unless the spread width also matched.

But I'd bias this way anyway - my one really bad experience with spreads was with a narrow call spread that was too close to the money. I had a small position that rapidly went half way through the spread. If nothing else the wide spread count will lessen my disregard for position size and taking on too much leverage . And as with puts, it'll make the short calls behave a lot like covered calls, even if there will be too many of them to take assignment on.

 

[AquaY]

Anyone taken a look at the max pain chart for next week 10/08 yet?
Weird that max pain is listed at $725.... because there is a solid put wall at $720 of 55k puts but also a call wall at $700 of almost 32k calls....
Just weird IMO.
I am looking to open a BPS for next week sometime this afternoon or tomorrow morning and wondering where to place the sold strike - I was thinking $735 but that gave me pause.
Any "not advice" is welcome.

I've been mostly conservative in my strikes for the short leg of my BPS.
I like to have at least one position more aggressive but it is a small % of my trades.
For me 735 is a little too aggressive for next week. 732 is a critical support level and I like having a critical support level between my strike and the SP.
Makes me all warm and fuzzy. The macros concern me more than TSLA.
Even the P&D #s could be great but expectations are for them to be even greater and the stock may get nothing out of them. We don't know.
The market itself has a lot of things going on that could go against it and drag TSLA down.
The Debt ceiling fight that is hanging over our heads could cause further market unease next week and the week after for example.

While I think 735 isn't overly aggressive at this time it is a little too aggressive for me because of macros.
I'd look at 720. maybe 730. But that's just for my strategy.
So this not advice advice is for you to apply your strategy and manage the position as you normally do.
I'm sure others are reading this and saying 735 is not very aggressive at all. What matters is what you think,

 

[vikings123]

I've been mostly conservative in my strikes for the short leg of my BPS.
I like to have at least one position more aggressive but it is a small % of my trades.
For me 735 is a little too aggressive for next week. 732 is a critical support level and I like having a critical support level between my strike and the SP.
Makes me all warm and fuzzy. The macros concern me more than TSLA.
Even the P&D #s could be great but expectations are for them to be even greater and the stock may get nothing out of them. We don't know.
The market itself has a lot of things going on that could go against it and drag TSLA down.
The Debt ceiling fight that is hanging over our heads could cause further market unease next week and the week after for example.

While I think 735 isn't overly aggressive at this time it is a little too aggressive for me because of macros.
I'd look at 720. maybe 730. But that's just for my strategy.
So this not advice advice is for you to apply your strategy and manage the position as you normally do.
I'm sure others are reading this and saying 735 is not very aggressive at all. What matters is what you think,

Even with bad macros Tesla is showing some amazing strength. I think this is indicative of smart money moving their money to better assets like TSLA.

Just take a look at all the growth stocks. They are getting slaughtered and to me some of them are still overvalued. OTOH Tesla is about to get into a busy period with huge catalysts. The bigger risk to me is the expansion of FSD beta and/or any NHTSA action.

 

[buttershrimp]

Pretty sure the price on 10/8 will be 700-800, +/- 50. So I'm opening a 50/100/1000/1050 IC, limit fill @$4 premium.... hasn't filled yet.

 

[pz1975]

The nice thing about weeks with a binary event like next week (P&D) is the IV goes up so one can sell puts/BPS (or calls but I'm avoiding those right now) for the same premium as other weeks but do so at safer, more OTM strikes. This is what I tend to do on these weeks. I expect my total profit to end up about a bit higher, but I buy myself a lot more safe room by going more OTM on the short puts.

For example, Oct8 700 puts are $9.50 now. That seems like a very safe number and is significantly higher than they were for this week at the same DTE. Even 650 puts next week are $5.40, which is nice profit for a SP that would be extremely unlikely to get to.

 

[adiggs]

Pretty sure the price on 10/8 will be 700-800, +/- 50. So I'm opening a 50/100/1000/1050 IC, limit fill @$4 premium.... hasn't filled yet.

That's a pretty steep downward bias. Prepping for a $600 drop, but only a $200 gain. Looks risky to me.

 

[buttershrimp]

That's a pretty steep downward bias. Prepping for a $600 drop, but only a $200 gain. Looks risky to me.

I figure if it reaches mid-way between the strikes, I'll roll for $2 credit. Still awaiting fill.

 

[AquaY]

Even with bad macros Tesla is showing some amazing strength. I think this is indicative of smart money moving their money to better assets like TSLA.

Just take a look at all the growth stocks. They are getting slaughtered and to me some of them are still overvalued. OTOH Tesla is about to get into a busy period with huge catalysts. The bigger risk to me is the expansion of FSD beta and/or any NHTSA action.

I agree but Schiff happens