Wiki Selling TSLA Options - Be the House

[MXWing]

As a courtesy to theta gang here, I'll declaring I'll be buying some of the calls people are selling here.

I've been analyzing entry and I might come in a little early but I think this will be hockey stick recovery.

Price depression seems way overdone. Like one little pawn is paralyzing the entire chess board.

When little pawn decides to pull out the rug..


View attachment 733528

Tesla low was 983 the day I posted, this with the finish of 1017. I started buying calls on Tuesday as I mentioned.

With the strong finish above max pain, I see a bullish continuation going into next week. Macro can derail anything but ceteris paribus (all other things being equal) careful on short calls.

When Elon was tweeting and selling, the gap fill was 900. Right now, the gap fill is 1220. I urge people do NOT fly close to the sun for short calls/short call leg of Iron Condors.

My vertical call spreads have a JAN top end 1300 target but, I may short 1300 as a calendar diagonal leading up to it.

 

[Tslynk67]

Folks, please don't clog this thread up with non-options chat, cheers!

 

[bkp_duke]

Folks, please don't clog this thread up with non-options chat, cheers!

EXACTLY - take the chit chat please to the main investors thread. Let's keep this one laser-focused on options please.

 

[Right_Said_Fred]

The FSD chatter has been removed. Please keep this thread clean.

 

[BornToFly]

The FSD chatter has been removed. Please keep this thread clean.

There are limited hours to get important news and the main thread can be a huge disaster on certain days. So I would ask that if something important happened with FSD, or something else, that there is a mention of it here, but that further discussion happen elsewhere. Something like - I just closed all my BCS because the is a major FSD update and it was just released to all owners, etc., should be mentioned here so we can all act on it as soon as possible. Thanks.

 

[samppa]

Lessons/guidelines/notes to myself from yesterdays fiasco..
- if trying to save a possibly losing position, and there is a chance to close at 0% loss, do it!! Don't wait around thinking it might become profitable. Especially if close to expiry, high gamma can really play havoc with atm options prices.

- stay away from bull call spreads.. when I look at my records for the past year, all my losses are from getting myself into trouble with bcs.. now why don't I remember that?

 

[OrthoSurg]

Lessons/guidelines/notes to myself from yesterdays fiasco..
- if trying to save a possibly losing position, and there is a chance to close at 0% loss, do it!! Don't wait around thinking it might become profitable. Especially if close to expiry, high gamma can really play havoc with atm options prices.

- stay away from bull call spreads.. when I look at my records for the past year, all my losses are from getting myself into trouble with bcs.. now why don't I remember that?

I closed my 19/11 1150 CC Thursday for a 15% profit, it was between -80% and -140% the whole week. I would have ended up with a profit Friday at close with 1140 but I was satisfied with what I got, a small winning position on what could have turned out to be a total loss

 

[bonk3125]

Positions on Monday open:
1. 990/940 BPS 11/19
2. 930/880 BPS 11/19
3. 1045/995 BPS 11/19
4. 1080cc 11/19
5. 900cc 11/19

Positions on Monday close:
1. 990/940 BPS 11/19. As we were hovering above 990, I rolled half of contracts to
2. 985/935 BPS 11/26 for 0.05 debit.
3. 930/980 BPS 11/19 kept the same.
4. Rolled 1045/995 BPS 11/19 to 1050/1000 BPS 11/26 for 1.50 debit. I'm at max loss anyway, but maybe I can push it out far enough until we get some recovery.
5. Added a few 1100/1150 BCS 11/19 to try to offset some of these debits.
6. 900cc 11/19 as is. Will plan to roll these on Wed-Fri to next week and use credits to improve strike on one contract at a time.
7. 1080cc 11/19 as is. This is the one contract I've been rolling up and out from 900cc. Will see how the week turns out. Maybe I'll be able to liberate these shares this week.
8. Opened 1105cc 11/19. Just trying to scalp some premium.

1105cc rolled to 1175cc 11/26 for small credit.

1100/1150 and 1110/1160 BCS... hurts just typing it out lol. Waited too long, kept missing my opportunities to roll/close for less loss. End of the day, rolled 1/3 of each to 1110/1160 and 1135/1185 for even money as SP was running away from me. The remaining 2/3 of each position, I just took my lumps and closed for loss. I debated whether to roll them, but I am just not confident that SP will stay down (which is a good thing for the rest of my portfolio). I'm already mentally prepared to close next week's rolls for a loss as well. Decreasing my position size (# contracts) will help me sleep well at night next week though.

Positions on Friday close:
1. 900cc 11/26. Continuing split/roll from Hertz/gamma.
2. 915cc 11/26. Able to split/roll another contract up.
3. 1140cc 11/26 and 1175cc 11/26. Perhaps one of these will expire OTM and I will have finally rescued an original 900cc. Otherwise, keep on rolling.
4. 985/935 BPS 11/26. Seem safe enough.
5. 1050/1000 BPS 11/26. Less safe. May close on Mon/Tues.
6. 1110/1160 BCS 11/26. Pretty much at midpoint. Will be looking for roll opportunity as soon as we open Monday.
7. 1135/1185 BCS 11/26. I think I learned my lesson. Roll early. Will be looking to do so Monday.

I feel... gun-shy? Past two weeks have knocked down my confidence. I didn't need to open those BCS but was so worried about my BPS positions that I wanted scrape some kind of win for the week. Bit me in the butt. Expensive lesson. Will be staying away from BCS for now given the potential catalysts coming up.

What are everyone's BPS strikes? Looks like 1000 is a solid floor. Mid-BB at 1060 but too close for my comfort. 900 seems to be accepted as a very solid floor, near lower BB and the ~910 gap-fill. Premiums seem kind of low at 900 though. Guess that's my greed talking. Maybe I need to practice patience and use @adiggs advice to sell puts into strength (down day). I already have enough open positions to manage next week. That's another lesson for me. Too many open positions makes it very difficult for me to manage when more than one go the wrong way. Simplicity would've been helpful to me this week.

Thanks for listening. It really helps writing this all out. Re-centers my brain. I'll probably still open some positions on Monday though lol.

 

[chiller]

I rolled my 1x Dec17 1160 PUT into 3x Dec03 1070 PUTs for 11.25 credit early yesterday.

 

[winfield100]

I read or skim this thread, but as I have stated before, I am forbidden to play in the options by my spouse, however, IF I understand dimly at best, volatility (IV ?) is something having to do with options. I have noticed an increase in volatility in around the last 4-5 weeks, as measured by an indicator called "true range"

"true range" is the max of either,
High -Low, OR
absolute value of High-yesterdays close OR
absolute value of yesterdays close - Low,
then usually a 14 day average

So
last year ATR 14 day smoothed overlaid on SP

To get a clearer picture, not a lot happened even when the 5:1 split occurred, BUT from mid June until about
4 weeks ago it was chugging along at +/- $20-22

Last 6 months zoom in so recently as of Friday, you should expect a range of $1,040 to $1,166 ie +/- ~$65 from +/- $23 or so (like triple volatility?)

last 6 weeks, the SP looks like reverting to the mean, with an upward slope.

Is this presaging a "melt-Up"?

If you look at the Accumulation/Distribution Indicator, a _confirmatory_ indicator, it is saying that ~195 million shares were purchased at slightly higher than lower, indicating buying pressure, but not something to use as trading but a "yep, it's doing that"
It has little to do with options other than a vague indication of rising demand

This with the chatter about "somethings up, but nobody knows anything so wild speculation abounds"

I hope this helps someone, and is useful to options trading folks, even if only cautionary

 

[BrownOuttaSpec]

What are everyone's BPS strikes? Looks like 1000 is a solid floor. Mid-BB at 1060 but too close for my comfort. 900 seems to be accepted as a very solid floor, near lower BB and the ~910 gap-fill. Premiums seem kind of low at 900 though. Guess that's my greed talking. Maybe I need to practice patience and use @adiggs advice to sell puts into strength (down day).

I am A LOT more cautious than most peoeple here (and still a newbie). I have been waiting since Wednesday to open a 780/880 for 11/26 but premiums were bad. Highest I saw was about $1.60. I was waiting for a dip all week but it never happened. I think late on Friday they were about $0.50 and really didn't feel that was worth it. Next week is a short week with the holidays and wanted to get some "easy money" and didn't want to put in an order for anything 12/3 yet. Personally I do feel like ~1,000 is a solid floor for next week but with my strategy I wouldn't do a BPS higher than 830/930.

I am hoping for a big Elon selling dip (or MMD @ 10:30am-ish) on Monday to sell those BPS for decent money but who knows

 

[OrthoSurg]

I read or skim this thread, but as I have stated before, I am forbidden to play in the options by my spouse

You seem to have great insight and excellent analysis. You should start selling 1 contracts at a time to show your spouse you are not playing in the options but actually earning income for intelligent work. My wife read a story on Physician Financial Independence Facebook group about a woman who was earning 900k yearly income as plastic surgeon. She accumulated 4M over 7 years of plastics and her husband who worked in IT with a salary of $90,000 managed to lose 1M of her money trading options over 18 months in 2019. He was telling her he had earned good interest with her money and he doubled down trying to recover and ended up losing a total of 1.7M before she realized he was lying about his gains which were losses.

That is what I call playing with options.

 

[corduroy]

This trade is not my normal style of 20%+ OTM, but I'm trying to think outside the box. I've been thinking of incorporating "I dare you" trades, like this BPS. An interesting dynamic that I don't see in far OTM weeklies is that the extra time and higher credit drastically lowers the max risk - over 50% in this case. And the credit is higher than the max risk. Given my bullish outlook for the next 2 months, this doesn't seem as risky as it looks on first glance. (Not advice!)

21st Jan 2022 $1100 Put (buy)
21st Jan 2022 $1200 Put (write)

Entry credit: $5,563.00 net credit
Maximum risk: $4,437.00 (at TSLA$1,100.00)
Maximum return: $5,563.00 (at TSLA$1,200.00)
Max return on risk: 125.4% (726% ann.)
Breakeven at expiry: $1,144.35
Probability of profit: 49%

 

[ammulder]

This trade is not my normal style of 20%+ OTM, but I'm trying to think outside the box. I've been thinking of incorporating "I dare you" trades, like this BPS. An interesting dynamic that I don't see in far OTM weeklies is that the extra time and higher credit drastically lowers the max risk - over 50% in this case. And the credit is higher than the max risk. Given my bullish outlook for the next 2 months, this doesn't seem as risky as it looks on first glance. (Not advice!)

21st Jan 2022 $1100 Put (buy)
21st Jan 2022 $1200 Put (write)

Entry credit: $5,563.00 net credit
Maximum risk: $4,437.00 (at TSLA$1,100.00)
Maximum return: $5,563.00 (at TSLA$1,200.00)
Max return on risk: 125.4% (726% ann.)
Breakeven at expiry: $1,144.35
Probability of profit: 49%

Honestly, what I don’t like about that is that once the cash from selling is in my account balance, I can’t mentally keep it in a ”pending” bucket. Then if the time comes to buy back, it hurts just like a loss. So if, for instance, the stock finished the week at $1170 and I had to pay maybe $2k to close it, I would not be happy. Or if I went to roll, I might be suckered into a too-aggressive roll destination because I couldn’t close for next to nothing. So while the gain/loss might look good, I don’t think it’s a trade that would work for me and my trading mentality.

 

[mongo]

Selling options is very different then buying them.
Oversimplified comparison (ignoring mental effort, personal investment, stress, spreads, taxes and opportunity cost)
Stock market: buy TSLA at market/ sell TSLA at current market
Selling options: Sell ATM/OTM put for premium, worst case you buy TSLA at an effective discount to current market.
Sell ATM/OTM covered call for premium, worst case you effectively sell TSLA above current market.

Buying options: worst case is loss of purchase price
Options profit calculator is great for running scenarios.

 

[MXWing]

You seem to have great insight and excellent analysis. You should start selling 1 contracts at a time to show your spouse you are not playing in the options but actually earning income for intelligent work. My wife read a story on Physician Financial Independence Facebook group about a woman who was earning 900k yearly income as plastic surgeon. She accumulated 4M over 7 years of plastics and her husband who worked in IT with a salary of $90,000 managed to lose 1M of her money trading options over 18 months in 2019. He was telling her he had earned good interest with her money and he doubled down trying to recover and ended up losing a total of 1.7M before she realized he was lying about his gains which were losses.

That is what I call playing with options.

Does plastic surgeon lady need a boyfriend?

Such a juicy story, would love to see the entirety of it posted on Wallstreet Bets.

I don't know why I do this because "no good deed goes unpunished" but I'm walking a friend through selling his first puts. Something sweet like 840 bucks for 2 contracts expiring next week.

Friend: That's it for 180,000 risk?!??!
Me: It's not 'really' 180,000 risk. Unless Tesla goes to 0. Is it going under 900?
Friend: No
Friend: 840 bucks still though..
Me: Who's going to give you 840 bucks..?

Friend: start's looking at premiums for 1100 strike puts.
Me: <sigh>
Friend: Don't you have 1100 strike calls?
Me: <sigh> Yes, but its not the same.

 

[OrthoSurg]

Does plastic surgeon lady need a boyfriend?

Such a juicy story, would love to see the entirety of it posted on Wallstreet Bets.

I don't know why I do this because "no good deed goes unpunished" but I'm walking a friend through selling his first puts. Something sweet like 840 bucks for 2 contracts expiring next week.

Friend: That's it for 180,000 risk?!??!
Me: It's not 'really' 180,000 risk. Unless Tesla goes to 0. Is it going under 900?
Friend: No
Friend: 840 bucks still though..
Me: Who's going to give you 840 bucks..?

Friend: start's looking at premiums for 1100 strike puts.
Me: <sigh>
Friend: Don't you have 1100 strike calls?
Me: <sigh> Yes, but its not the same.

she will probably run away the minute you say you do option trading

3 of my friends are currently following the 30hours of Optionalpha course after they asked me how were doing my investments. Hope they will not buy OTM SPY Calls expiring the following day. It’s never good when a newbie answers the questions of other newbies. It never ends well when the blind is leading the blind. The only difference here is that I know I am blind.

 

[Chenkers]

I was driving for 2 hours during the second half of trading on Friday. I had 200x each of 1125/1165 and 1130/1170BCS that I was watching closely, hoping they'd be safe. Everything was looking good while they were holding it around 1107 but then it shot up to 1117 and then 1123. I ended up pulling over and getting out the laptop before it got too out of hand. I closed out the 1125's for a loss while OTM and rolled the 1130/1170 to 1220/1260 for next week. Everything else closed out OK and I've made an OK overall profit for the week but could do with less stressful closes in future.

 

[st_lopes]

I was driving for 2 hours during the second half of trading on Friday. I had 200x each of 1025/1065 and 1030/1070BCS that I was watching closely, hoping they'd be safe. Everything was looking good while they were holding it around 1107 but then it shot up to 1117 and then 1123. I ended up pulling over and getting out the laptop before it got too out of hand. I closed out the 1025's for a loss while OTM and rolled the 1030/1070 to 1220/1260 for next week. Everything else closed out OK and I've made an OK overall profit for the week but could do with less stressful closes in future.

Im thinking you mean 1125/1165 and 1130/1170 otherwise I’m confused about how you rolled for that much strike improvement without paying a meaningful debit

 

[AquaY]

You seem to have great insight and excellent analysis. You should start selling 1 contracts at a time to show your spouse you are not playing in the options but actually earning income for intelligent work. My wife read a story on Physician Financial Independence Facebook group about a woman who was earning 900k yearly income as plastic surgeon. She accumulated 4M over 7 years of plastics and her husband who worked in IT with a salary of $90,000 managed to lose 1M of her money trading options over 18 months in 2019. He was telling her he had earned good interest with her money and he doubled down trying to recover and ended up losing a total of 1.7M before she realized he was lying about his gains which were losses.

That is what I call playing with options.

Interesting. You call that playing with options while I call it being married to a lying idiot