Wiki Selling TSLA Options - Be the House

[adiggs]

I would advise keeping in mind that Fed has a very serious problem, run away inflation.
Big run up in equity, and/or housing markets I would think will be very detrimental to their efforts to contain the run away inflation.
JPowell was praising Volcker recently on how Volcker handled the run away inflation.
Big run ups in equities this time will likely end with large funds selling equities to retail and leaving them as bag holders.
Mar-2020 is very different from this time. Post covid there was a lot of liquidity the Fed injected into the system. This time, they are very serious about draining the money out of the system to fight inflation.
It's not just the Fed funds rate, there's Balance Sheet run-off, and likely active QT. These will have serious effects on risk-on assets.
The rise in mortgage rates in the last few weeks, as Fed stopped adding to their MBS holdings, is likely a sign of things to come.

I think we're on the same page.

I agree with Bullard that we have runaway inflation. The question is what to do about it. This quarter point interest rate increase has been priced in so long, my claim is that it bas been perceived as a business-as-usual approach, rather than a runaway inflation reaction. I.e. the dominant view among investors is that the Fed totally has this under control and this inflation isn't runaway - its being handled.

MHO this raise needed to be a half point specifically to make the point that inflation is too high. That investors are being put on notice that this is NOT business as usual. Inflation is a serious problem and it may need strong medicine to get a handle on it.

The balance sheet run off is the other knob I'm very interested to hear how it gets turned. Fed hasn't begun talking about it, beyond additional liquidity stopped in March. Does that mean that as current bonds roll off, replacement bonds will be purchased keeping the balance sheet flat and thus the money in circulation? Or does the Fed just let the balance shrink naturally as bonds roll off.

Or does the Fed get more aggressive and begin selling off the portfolio into the private sector (draining liquidity even faster).


I think that the balance sheet decisions will have a bigger and more direct impact on inflation. I think that also means easier to overshoot. And we don't have details yet beyond "lets stop adding liquidity".

And on the interest rate side - let's shift from aggressive stimulation to aggressive stimulation.

 

[BornToFly]

I think we're on the same page.

I agree with Bullard that we have runaway inflation. The question is what to do about it. This quarter point interest rate increase has been priced in so long, my claim is that it bas been perceived as a business-as-usual approach, rather than a runaway inflation reaction. I.e. the dominant view among investors is that the Fed totally has this under control and this inflation isn't runaway - its being handled.

MHO this raise needed to be a half point specifically to make the point that inflation is too high. That investors are being put on notice that this is NOT business as usual. Inflation is a serious problem and it may need strong medicine to get a handle on it.

The balance sheet run off is the other knob I'm very interested to hear how it gets turned. Fed hasn't begun talking about it, beyond additional liquidity stopped in March. Does that mean that as current bonds roll off, replacement bonds will be purchased keeping the balance sheet flat and thus the money in circulation? Or does the Fed just let the balance shrink naturally as bonds roll off.

Or does the Fed get more aggressive and begin selling off the portfolio into the private sector (draining liquidity even faster).


I think that the balance sheet decisions will have a bigger and more direct impact on inflation. I think that also means easier to overshoot. And we don't have details yet beyond "lets stop adding liquidity".

And on the interest rate side - let's shift from aggressive stimulation to aggressive stimulation.

But current inflation isn't the result of a roaring economy. It's the result of massive supply problems (due to a 2+ year global pandemic and a major war) causing a mismatch between supply and demand that can cause a recession. People are hurting, and raising interest rates is only going to make the problem worse. I think it's a big mistake.

 

[elasalle]

April 1st - 1200 CCs for $4 ... sold some

(getting in the zone, where I am good to be parting with a few calls (bought at recent lows) at the right prices ...)

+ bought 8 more shares with the pennies

 

[OrthoSurg]

Rolled my 25/3 990CCs to 4/1 1035 for $1 credit at market open. I wonder how high the momentum will bring us before settling in.

 

[jeewee3000]

April 1st - 1200 CCs for $4 ... sold some

Thank you for your service.

 

[OrthoSurg]

April 1st - 1200 CCs for $4 ... sold some

I’m jealous of your 1200 strike price. I really don’t like my 1035, already.

 

[CHGolferJim]

But current inflation isn't the result of a roaring economy. It's the result of massive supply problems (due to a 2+ year global pandemic and a major war) causing a mismatch between supply and demand that can cause a recession. People are hurting, and raising interest rates is only going to make the problem worse. I think it's a big mistake.

Many economists, and Chair Powell I believe, attribute about half of current inflation to recent monetary policy and deficit spending, i.e., massive growth of money supply chasing relatively fixed amount of goods and services.

 

[mickle]

I was watching the Maverick of Wall St video last night, he thinks there is (and has been for a few weeks) some Tesla Whale buying up lots of 1000 strike calls early in the week to manipulate the stock, then these get dumped before the week ends and the SP drops. Could go back to 920 levels by 3/25. Based on that and some other trades he showed, I'm experimenting with a Bear Put Spread. Bought a 945 and sold a 940 for $0.90 debit. If stock drops below 940 I get about 4-5x return.

 

[pz1975]

I have been staying away from covered calls completely during this run-up but Mar25 $1,200s for over $1 were too good to pass up. If the SP goes up another 20% by Friday close that would be beyond shocking.

 

[TheTalkingMule]

Ever notice there's never a short-selling market maker around when you need one? Two and a half months they've been shorting this thing to death, now when I simply need a bit of capping......nowhere to be found!

It's almost like they want me to lose money.

 

[elasalle]

I was watching the Maverick of Wall St video last night, he thinks there is (and has been for a few weeks) some Tesla Whale buying up lots of 1000 strike calls early in the week to manipulate the stock, then these get dumped before the week ends and the SP drops. Could go back to 920 levels by 3/25. Based on that and some other trades he showed, I'm experimenting with a Bear Put Spread. Bought a 945 and sold a 940 for $0.90 debit. If stock drops below 940 I get about 4-5x return.

Could be MM in trouble with an upcoming Gamma Squeeze as well
Believed the 6+ rate hikes, fear of war and sold too many calls at low prices ....

 

[jeewee3000]

I took the liberty of rolling a (rescued) JAN2023 -830p/+730p forward in time to a 4/08 -970p/+770p for a slight credit.

If the rally sticks I free up margin early. If not, I can roll this spread up until $870.

If this technique proves succesful I'll be able to roll more BPSes forward in a similar manner. I could've done multiple at a time but if Ukraine or inflation fears were to hit in the next two weeks and we drop back below $900 I could be in a pickle. This is an experiment in "saving saved BPSes".

Slowly does it.

 

[Criscmt]

But current inflation isn't the result of a roaring economy. It's the result of massive supply problems (due to a 2+ year global pandemic and a major war) causing a mismatch between supply and demand that can cause a recession. People are hurting, and raising interest rates is only going to make the problem worse. I think it's a big mistake.

Isn’t over stimulation, too much money in the hands of people, inflated assets, wealth effect, likely key reason for substantially over-normal demand, especially a time less was being produced, leading to this inflation?
Looks like significant part of people feel wealthy now, and spending more like on housing, all kinds of goods, services. Unfortunately, the others, especially poor, are suffering the pain.

 

[BornToFly]

Anyone have a prediction for Friday close? I'm starting to sweat my 1050/1150 BCS.... I think next week is going to be strong going into Q1 P&D weekend, so I really don't want a roll into next week below 1150.

 

[BornToFly]

It's crazy. The 1050 calls are worth more than the 1000 Puts right now. SP at 1026

 

[TheTalkingMule]

Anyone have a prediction for Friday close? I'm starting to sweat my 1050/1150 BCS.... I think next week is going to be strong going into Q1 P&D weekend, so I really don't want a roll into next week below 1150.

Looking at the chart I was excited to see MM's trying to hold $1030 as I have a few 1005CC. Maybe that lets them make a run at $999 for Friday if macros tank. Which they easily could in the next two days. Then I looked at today's volume....

14.3M shares by 10:30 when we had less than 1M at the open. I'm no pro, but that's more than double normal volume. I don't see many MM's wanting to short/cap this thing and have it get even worse next week. Too much real volume to eat.

I think we're looking at 1050+ for Friday. We shall see.

 

[chiller]

Bought back my 1030 calls for Friday when we crossed 1000. Sold a few 1200C (@ 2.3 USD) and 1300C (@1 USD), also for this Friday.

 

[Right_Said_Fred]

Last week between 820 and 900 I sold 30 calls and those looked to be going ITM a few days ago, so I've been rolling them up and out (and harvesting more premium in the meantime). They are now at strike 1100 for May (20x) and June (10x). If necessary I will keep rolling up and out, staying ahead of the game. I don't really mind the stock going up, because I'm also still short 20x p1050 for 4/14. Each direction is good.

 

[BornToFly]

What do you guys think is better. Rolling 1x 1050/1150 to 3x 1100/1200 for this Friday, or 2x 1175/1275 for next Friday? Or wait until we see what happens tomorrow?

 

[CHGolferJim]

I think we're well into a Fed/GigaBerlin/S&P rebalancing rally with more to come from GigaAustin/P&D/1Q profits. Thesis is we'll get to the $1100+ range before the profit taking begins around 4/10 when 1Q is published, with the rolls increasingly less attractive until then. With only 2DTE to play with, I did the following today:

• BTC 0325-c$850 and $895 (gulp, could have done it for 1/50 of today's cost two weeks ago)
• STO 0520-c$980 and $1000, and 0819-c$1100
• was targeting a small credit, but the SP ran up, so a total debit of $8k to protect > six figures of appreciation (unrealized CG in a Roth)

Now to relax a bit (it's almost summer in the South) and watch for a dip to roll down and in so I can sell again once this spurt is done. Strikes were chosen to minimize total cost, and develop towards assignment of the non-core shares (+/- $1200) purchased in Jan at $974 and $1073 for buy-writes.