Wiki Selling TSLA Options - Be the House

[InTheShadows]

Thanks to TSLA, Options & confidence from here i had my best month ever.
+406.8% gain in one month on the entire portfolio - at least to the statistics of IBKR.

Thank you, guys

Dang!!! Nice job. I thought my 72.87% monthly portfolio gain was awesome.

That’s ok. I’ll take either of our gains for a month any day.

You must have had a lot of long calls. My shortest dated (former) LEAPs are 2 650 March 2022. Everything else is 2023 and later.

I did have some Jan 22 1000 calls that I cut loose for small losses before earnings to capture the IV gain into earnings. Ugh what a mistake that was. I looked at their value once mid last week and decided to not look at them again.

 

[BornToFly]

My wife wanted me to stay 50% away from being caught ITM, learned a bit with my 1325 CC from this week. I opened up a straddle 805 and 1475. Still feel comfortable, I am studying my comfort zone before moving in close in the 15% range and starting with vertical spreads which are harder to adjust. This week has been crazy at work so I barely have 15 minutes in the day to watch the stock so I will stay far OTM for the moment while volatility is high.

I can understand that. My wife was not happy that we were all in TSLA a few years ago, but I ignored her and she AIN'T COMPLAINING NOW!!! Tell her the Puts side is safer, so negotiate 30% on the Put side and you'll keep 50% on the call side....

 

[BornToFly]

I am really torn about my Jan 2024 $1500 strike CCs. I sold them last week for $164, expecting a pull back, and a plan to buy them back at a profit. Instead, they are now at $295 (80% loss). The fact that yesterday's drop isn't continuing today is making me less confident that we are going to have a drop below $1000 and an opportunity for me to buy them back without a loss. So time for another poll.... I expect the SP to be $3000+ in 2024. Taxable account. Do I

1) Let them expire in 2024 and take my $1,500/share and cry about what could have been.
2) Wait until 2024 and then slowly roll up/out.
3) Sell 10% of the shares now to buy them back and eat the loss.
4) Buy them back using most of my cash without selling shares (and then rely more on margin for my BPS).
4) Do something else (like buying Jan 2024 800 strike LEAPS)?

I'm starting to lean toward #4

 

[elasalle]

What would be the yearly yield of a strategy where someone sets a wide strangle every Monday? Let’s say someone would have 1000 shares and they sell CC against all their shares for a price they would be comfortable letting all their shares go, let’s say the stock price is $1000 and they sell 10 Covered calls at $1500 strike price expiring the same Friday. At the same time they sell 10 Put contracts at $500 if they are ready to double down the number of shares in margin at that price for an expiration on the same Friday, has someone tried this but the premiums are so low that the strategy would be uninteresting because too far OTM so the premium are ridiculously low?

Shouldn't strategy change based on market trends ?

 

[Cherry Wine]

I am really torn about my Jan 2024 $1500 strike CCs. I sold them last week for $164, expecting a pull back, and a plan to buy them back at a profit. Instead, they are now at $295 (80% loss). The fact that yesterday's drop isn't continuing today is making me less confident that we are going to have a drop below $1000 and an opportunity for me to buy them back without a loss. So time for another poll.... I expect the SP to be $3000+ in 2024. Taxable account. Do I

1) Let them expire in 2024 and take my $1,500/share and cry about what could have been.
2) Wait until 2024 and then slowly roll up/out.
3) Sell 10% of the shares now to buy them back and eat the loss.
4) Buy them back using most of my cash without selling shares (and then rely more on margin for my BPS).
4) Do something else (like buying Jan 2024 800 strike LEAPS)?

I'm starting to lean toward #4

What about getting aggressive with a smaller put position and using the proceeds to slowly buy back? If the stock moves against your put position, roll it as needed, and if it moves enough, you’ll be able to buy the CCs back.

 

[pz1975]

I am really torn about my Jan 2024 $1500 strike CCs. I sold them last week for $164, expecting a pull back, and a plan to buy them back at a profit. Instead, they are now at $295 (80% loss). The fact that yesterday's drop isn't continuing today is making me less confident that we are going to have a drop below $1000 and an opportunity for me to buy them back without a loss. So time for another poll.... I expect the SP to be $3000+ in 2024. Taxable account. Do I

1) Let them expire in 2024 and take my $1,500/share and cry about what could have been.
2) Wait until 2024 and then slowly roll up/out.
3) Sell 10% of the shares now to buy them back and eat the loss.
4) Buy them back using most of my cash without selling shares (and then rely more on margin for my BPS).
4) Do something else (like buying Jan 2024 800 strike LEAPS)?

I'm starting to lean toward #4

I vote 2 with the expectation that sometime between now and Jan 2024 there will be a TSLA drop (temporary) based on macro events and they will turn green for you and you can close them out then.

 

[elasalle]

I am really torn about my Jan 2024 $1500 strike CCs. I sold them last week for $164, expecting a pull back, and a plan to buy them back at a profit. Instead, they are now at $295 (80% loss). The fact that yesterday's drop isn't continuing today is making me less confident that we are going to have a drop below $1000 and an opportunity for me to buy them back without a loss. So time for another poll.... I expect the SP to be $3000+ in 2024. Taxable account. Do I

1) Let them expire in 2024 and take my $1,500/share and cry about what could have been.
2) Wait until 2024 and then slowly roll up/out.
3) Sell 10% of the shares now to buy them back and eat the loss.
4) Buy them back using most of my cash without selling shares (and then rely more on margin for my BPS).
4) Do something else (like buying Jan 2024 800 strike LEAPS)?

I'm starting to lean toward #4

I had Sep 22 1200 CC's lurking in my account. Didn't notice them till yesterday. Closed. Negated losses with other gains. Closed 5 CCs and 2 Calls. (0 sum)
Immediately sold Jan 23 2000 on the 3 that became free and deployed that into BPS for next week .... +so 80-90% of CC's losses, regained
BPS/BCS is not my main strategy, need to get hang/ full confidence of it based on time Mgmt with job - so supplemental income for now

 

[MrMoo]

I am really torn about my Jan 2024 $1500 strike CCs. I sold them last week for $164, expecting a pull back, and a plan to buy them back at a profit. Instead, they are now at $295 (80% loss). The fact that yesterday's drop isn't continuing today is making me less confident that we are going to have a drop below $1000 and an opportunity for me to buy them back without a loss. So time for another poll.... I expect the SP to be $3000+ in 2024. Taxable account. Do I

1) Let them expire in 2024 and take my $1,500/share and cry about what could have been.
2) Wait until 2024 and then slowly roll up/out.
3) Sell 10% of the shares now to buy them back and eat the loss.
4) Buy them back using most of my cash without selling shares (and then rely more on margin for my BPS).
4) Do something else (like buying Jan 2024 800 strike LEAPS)?

I'm starting to lean toward #4

Sorry i don't know what you are doing man. Like everything you said to me makes 0 sense. Can you go through this decision with me?

1. You sold CC's which are over 2 years away from expiring.
2. You are freaking out about a movement after 1 day. 1 day dude. You have over 700 days until expiry.
3. Those calls you sold are made up of mostly theta. Even if the stock went to $1000 the profit you would of made wouldn't of even been that much to offset the risk.

Like I just don't understand why you would sell a long term option but then get scared after 1 day? What?

 

[MindOverMatcha]

These spreads are still quite thin..

Right now I'm cautious after this huge rally, so I'm using $200 wide bull put spreads.. I know I'd get more leverage with thinner spreads but these give me enough income.
Yesterday I opened bps for 11/5
-1100/+900 (small, risky position)
-1050/+850
-1000/+800

The width is a good safety measure, so I'll definitely incorporate more of these in my positions. Appreciate the help.

Try Power Etrade
You can go to Account, Positions then click on your position and hit roll ( that is of course if etrade hasn't changed your positions to fit a better margin profile. If they have you would have to match it up the way you intended. I forgot how to do that. If that is an issue call them and ask .
Anyway, if the spread trade is shown when you click roll it will bring up a ticket with all 4 positions and then you simply modify what you want in that and input your order.

Another way that should work with Power Etrade is to Go to Trading. Click on Trade Lab, Click on Build strategy and simply add legs via "add option"

Thank you! Glad to have found so many ETrade users here.

 

[TheTalkingMule]

I am really torn about my Jan 2024 $1500 strike CCs. I sold them last week for $164, expecting a pull back, and a plan to buy them back at a profit. Instead, they are now at $295 (80% loss). The fact that yesterday's drop isn't continuing today is making me less confident that we are going to have a drop below $1000 and an opportunity for me to buy them back without a loss. So time for another poll.... I expect the SP to be $3000+ in 2024. Taxable account. Do I

1) Let them expire in 2024 and take my $1,500/share and cry about what could have been.
2) Wait until 2024 and then slowly roll up/out.
3) Sell 10% of the shares now to buy them back and eat the loss.
4) Buy them back using most of my cash without selling shares (and then rely more on margin for my BPS).
4) Do something else (like buying Jan 2024 800 strike LEAPS)?

I'm starting to lean toward #4

I would suggest that you buy low and sell high. I think you'll have a window to do so at some point. Just don't get greedy.

 

[mickificki]

I am really torn about my Jan 2024 $1500 strike CCs. I sold them last week for $164, expecting a pull back, and a plan to buy them back at a profit. Instead, they are now at $295 (80% loss). The fact that yesterday's drop isn't continuing today is making me less confident that we are going to have a drop below $1000 and an opportunity for me to buy them back without a loss. So time for another poll.... I expect the SP to be $3000+ in 2024. Taxable account. Do I

1) Let them expire in 2024 and take my $1,500/share and cry about what could have been.
2) Wait until 2024 and then slowly roll up/out.
3) Sell 10% of the shares now to buy them back and eat the loss.
4) Buy them back using most of my cash without selling shares (and then rely more on margin for my BPS).
4) Do something else (like buying Jan 2024 800 strike LEAPS)?

I'm starting to lean toward #4

i'm a noob at this so...not advice!

if it were me I'd buy it back with cash, but i'd wait for the SP to dip. I'm not sure how likely it'll dip in Q4 since things are so bullish, maybe in Q1 sometime there will be an opportunity? Maybe if Berlin giga keeps getting delayed the SP will dip?

There are just so many catalysts coming on in the next 12 months...4680, more CATL LFP batteries, growth of Tesla Energy, FSD, Hertz, maybe Avis, cars sold out almost a year in advance, continued improvement on margin, Tesla insurance, solar, launch of Tesla semi and cybertruck, Berlin and Texas giga ramp, etc...

 

[corduroy]

I vote 2 with the expectation that sometime between now and Jan 2024 there will be a TSLA drop (temporary) based on Mack events and they will turn green for you and you can close them out then.

Agreed. In addition to macros events, the first FSD crash is almost certain to happen between now and then, which I expect to cause a huge FUDstorm drop.

 

[Knightshade]

Not that I expect anyone to care, but anyone selling a premature LEAP last week (as we hadn't finishing climbing to an ATH), is getting a disagree from me

Marginally more helpful now though- there'll be a DIP eventually. And you eat theta until then. No reason to do anything today.

 

[BornToFly]

Sorry i don't know what you are doing man. Like everything you said to me makes 0 sense. Can you go through this decision with me?

1. You sold CC's which are over 2 years away from expiring.
2. You are freaking out about a movement after 1 day. 1 day dude. You have over 700 days until expiry.
3. Those calls you sold are made up of mostly theta. Even if the stock went to $1000 the profit you would of made wouldn't of even been that much to offset the risk.

Like I just don't understand why you would sell a long term option but then get scared after 1 day? What?

Where are you getting 1 day? I sold them 8 days ago, and I am not happy about going almost 100% negative in a week. It was definitely a mistake selling them in the first place. I was in a bad place after big losses on BCS on Oct 25th and wanted to immediately replace the money lost. Definitely need to be less emotional in the future.

 

[Ogre]

We aren't shorts. We all want the stock to go up, but just in an orderly fashion.

I know. Though my comment was prompted by someone *buying* puts.

From what I’ve seen, the difference between here (quasi shorts is what I said above) and actual shorts is the folks here might sell calls or buy puts because they expect a short downturn, not because they feel the stock is fundamentally broken.

 

[BrownOuttaSpec]

Anyone using ETrade to roll or close BPS? I am looking to roll or close in the future, but see that I have to roll or close each leg individually. In a margin account or IRA, does this trigger any difficulties such as a margin call when a long leg is rolled before the short? I messaged my rep at ETrade but just wanted to know if others have been able to roll each put leg individually without issues.

Thanks!

I know that this has already been answered by others, but I made a post a few pages back about this (with pictures!):

Wiki - Selling TSLA Options - Be the House

Like others, I've also got about 75% of my shares stuck in covered calls ranging from 1000-1100 and mostly expiring in the next 1-4 weeks. I was able to roll all of them up a little bit last week for some credit, and more on Friday for very small strike improvements. I also sold a large BPS...

teslamotorsclub.com

 

[BornToFly]

There are just so many catalysts coming on in the next 12 months...4680, more CATL LFP batteries, growth of Tesla Energy, FSD, Hertz, maybe Avis, cars sold out almost a year in advance, continued improvement on margin, Tesla insurance, solar, launch of Tesla semi and cybertruck, Berlin and Texas giga ramp, etc...

Thanks for listing all the things that are making me freak out and want to buy back sooner rather than later....

 

[CHGolferJim]

What about getting aggressive with a smaller put position and using the proceeds to slowly buy back? If the stock moves against your put position, roll it as needed, and if it moves enough, you’ll be able to buy the CCs back.

Perhaps my Reallocation Plan which is underway is relevant to your question:

• HODL x core shares, and write cautious CC against .6x
• Own x/100 LEAPs in a ladder of 1/3 15-20%ITM, 1/3 ATM, and 1/3 15-20%OTM; roll/harvest as prices rise (= 50/50 allocation to shares/LEAPs)
• Hold 1/3x "short-term trading" shares against which I'll write ATM weekly CC and always allow to assign (no rolling, just accumulate ~2% weekly premiums)
• Build cash reserve, diworsify or build share/LEAP positions

 

[ammulder]

I am really torn about my Jan 2024 $1500 strike CCs. I sold them last week for $164, expecting a pull back, and a plan to buy them back at a profit. Instead, they are now at $295 (80% loss). The fact that yesterday's drop isn't continuing today is making me less confident that we are going to have a drop below $1000 and an opportunity for me to buy them back without a loss. So time for another poll.... I expect the SP to be $3000+ in 2024. Taxable account. Do I

1) Let them expire in 2024 and take my $1,500/share and cry about what could have been.
2) Wait until 2024 and then slowly roll up/out.
3) Sell 10% of the shares now to buy them back and eat the loss.
4) Buy them back using most of my cash without selling shares (and then rely more on margin for my BPS).
4) Do something else (like buying Jan 2024 800 strike LEAPS)?

I'm starting to lean toward #4

So, if I needed a big injection of cash up front, I'd sell long-dated puts, not calls. Ideally at a time with high IV and low stock price, like this past May. The down side is, it takes a really long time for all the time value to wear off, so they'll be a drag on your cash/margin for quite a while to come. The benefit of high IV/low stock price being that you can gain on the puts on either IV settling down for a while or the stock price going back up again, maybe giving you an early buyback opportunity.

This suggests another possibility of sell long-term puts to generate the cash to buy back the calls, though it would be all around better if there was a dip to do that. Right now, though, you could pretty much offset a 2024 $295 call with a 2024 $1100 put, which seems like a pretty safe bet given that we're over $1100 today and your concern is that the price will go up. You could also sell a number of 2024 put spreads to potentially use a bit less cash/margin and chunk it up more if you expect to buy back over time.

Whether you like locking cash/margin with long puts vs. locking shares with long calls is a different question.

 

[MindOverMatcha]

Already been answered by others, but I made a post a few pages back about this (With pictures!):

Wiki - Selling TSLA Options - Be the House

Like others, I've also got about 75% of my shares stuck in covered calls ranging from 1000-1100 and mostly expiring in the next 1-4 weeks. I was able to roll all of them up a little bit last week for some credit, and more on Friday for very small strike improvements. I also sold a large BPS...

teslamotorsclub.com

Wow! That extra point about how it affects purchasing power is super helpful! Thank you!