Wiki Selling TSLA Options - Be the House

[dc_h]

I'm holding my -p290s and -p275s until tomorrow. Feels like we bounced off (pre-split) 800 today and I don't know how much lower into the "700s" it will really go with Q3 results coming up on the horizon - although we do still have to get through September.

I'll be looking to buy calls if we do dip tomorrow and get down to around 250 next week.

I have a couple of 290p as well. If we rally tomorrow, I may roll, but ok taking the shares and selling CC's at 290 for next week. Learning to accept the wheel with a small set of shares is emotionally difficult at first, but it has been more profitable than my out of the money CC's and BPS.

 

[Chenkers]

i wonder if there is a better way to make $ instead of BW/CC (because rolling prems decrease when sp falls)...

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Personally, I'm not doing any BW/CC or even straight P- (theoretically similar returns) for that matter. I've analysed them and just don't like the inefficiency or premium generation for a specific margin usage compared to a BPS and/or BCS. For me I can generate 5 x the premium from a BPS for the same margin usage as a P-. I'd rather be more efficient and optimise what margin I'm using (I blame my engineering mindset) than stick with the less efficient although more manageble alternative. (I'm talking excess maintenance margin liquidity here, not borrowed margin). While I know a lot of people are very wary of spreads in the current climate, it primarily comes down to choosing strikes that will expire OTM. Whether it's a P-, BPS or BCS, I prefer to stick with less risky strikes that shouldn't go ITM, rather than go closer with a P- just because it's easier to roll. And since I've shifted to an historical data driven approach for choosing strikes a few months ago, I've thankfully had 100% success rate of BPS expiring OTM. Plus I'm continueing to generate weekly premiums well above what I previously earned in a very well paid job.

However at the moment all options premiums are down so whatever I sell I'm getting less than I was a few weeks ago. Since options trading is my only source of regular income, I've also been looking at what other ways there are to earn premiums. The approach I'm happiest with at the moment is day trading CC's. This is typically just done in the first hour of the days trading and is based on knowledge of TSLA trading patterns, particularly the MMD. The trick is recognising the pattern for the day and timing entry and exits. But so far it's working out well and brings in much more premium ($1-2 per CC each trade) than spreads alone, doesn't use margin, with less of the ongoing stress of positions open across the week. I'm doing some additional research and back testing on day trading CCs and will post more detailed information when I'm done.

And while day trading straight TSLA shares could bring in more income, I'm still attached to my shares and would prefer to avoid the sizable CGT impacts.

 

[EnzoXYZ]

That's pretty amazing. Are you trading weeklies and doing only BPS or CC and/or BCS as well? How far OTM do you typically go?

Yeah 100% weekly and all three types but I would guess 60-75% are BPS. BCS lose was where I had to roll forward and each time only one week at a time. The Hertz runup was my "lose" though they eventually did expired worthless. I believe some of the rolls was debit thus the technical loss. I haven't done much BCS after that experience. LOL.

 

[dl003]

If anyone's interested in my wave counts:
940 is the top of wave 3 (blue)
In order for TSLA to make new high, it has to break out of the downward trendline. So far, every attempt has been futile. The key here is the market does not allow it. Even when SPY went from 411 to 425, TSLA was not allowed to break out of this channel. That's exhaustion. Some may call it shorting but for every short to succeed, there's potential long who refuses to fight back. Supply vs demand is the name of the game.
Since we cannot break out, the next most logical move is a 50% retracement of the entire rally from 620-940. The ideal target is 780 (mid way point). The 3 wave structure from 940 also supports this thesis.
940 - 840 = 100
50% retracement to 890
890 - 100 = 790. Close enough to 780
This move should finish by next Friday
Let's see if I'm right

View attachment 839817

My timing was way off on this one, mainly due to the extended rally in SPY all the way up to 431. However, I hope we have found our near term bottom at 800 presplit. The stellar August China sales came in and lended a hand just in time. SPY has the potential to revisit 415 next week and bring TSLA along with it - to 900. I dont expect either to successfully reclaim their respective level but we’ll see.

 

[JustMe]

Good US jobs report just dropped. Looking like a Green Day ahead

 

[Drezil]

taking a page out of @Yoona s book:

0 is roughly premarket-low/yesterday close. 100 is premarket high.

273,9-285,8 sounds like a probable range .. especially with upwards pressure & max-pain putting pressure to keep it below 286...

 

[corduroy]

Personally, I'm not doing any BW/CC or even straight P- (theoretically similar returns) for that matter. I've analysed them and just don't like the inefficiency or premium generation for a specific margin usage compared to a BPS and/or BCS. For me I can generate 5 x the premium from a BPS for the same margin usage as a P-. I'd rather be more efficient and optimise what margin I'm using (I blame my engineering mindset) than stick with the less efficient although more manageble alternative. (I'm talking excess maintenance margin liquidity here, not borrowed margin). While I know a lot of people are very wary of spreads in the current climate, it primarily comes down to choosing strikes that will expire OTM. Whether it's a P-, BPS or BCS, I prefer to stick with less risky strikes that shouldn't go ITM, rather than go closer with a P- just because it's easier to roll. And since I've shifted to an historical data driven approach for choosing strikes a few months ago, I've thankfully had 100% success rate of BPS expiring OTM. Plus I'm continueing to generate weekly premiums well above what I previously earned in a very well paid job.

However at the moment all options premiums are down so whatever I sell I'm getting less than I was a few weeks ago. Since options trading is my only source of regular income, I've also been looking at what other ways there are to earn premiums. The approach I'm happiest with at the moment is day trading CC's. This is typically just done in the first hour of the days trading and is based on knowledge of TSLA trading patterns, particularly the MMD. The trick is recognising the pattern for the day and timing entry and exits. But so far it's working out well and brings in much more premium ($1-2 per CC each trade) than spreads alone, doesn't use margin, with less of the ongoing stress of positions open across the week. I'm doing some additional research and back testing on day trading CCs and will post more detailed information when I'm done.

And while day trading straight TSLA shares could bring in more income, I'm still attached to my shares and would prefer to avoid the sizable CGT impacts.

I would agree, from a capital efficiency viewpoint, I don't think you can beat BPS/BCS. I love ICs because of their capital efficiency. I have been trading ICs on SPY the last 6 weeks, mainly because I can get more "reps" in with 3 expirations per week, and hone my skills faster. I'm choosing positions with max return on risk average of around 7%.

I am more cautious with TSLA, because of what I consider and ever present risk of quick moves to the upside, so I am still biased to use BPS and sometimes CSPs. I did open a pretty large IC this week though, and that's looking good as of this morning.

 

[BornToFly]

Made good money on BPS for next week on this dip. Really need to look at the options chain now. It was really flat until about 225, then started to go up. I was able to do more narrow spreads -235/+225 for good return.

(235 if basically the old 700. Should be safe for next week.... Right...? RIGHT?!?)

 

[BornToFly]

Made good money on BPS for next week on this dip. Really need to look at the options chain now. It was really flat until about 225, then started to go up. I was able to do more narrow spreads -235/+225 for good return.

(235 if basically the old 700. Should be safe for next week.... Right...? RIGHT?!?)

I should have waited longer. Didn't think we would get a real MMD today. I keep forgetting that a record breaking Q3 in less than a month is a bad thing.... /s

 

[juanmedina]

Wow call premiums are so trash that is not even worth selling anything. Does this means that the stock is not going to have huge swings any more? 15% OTM for next week $320 pays $0.10. I also sold BPS this week other wise I would not be making any money -235/+245 here.

 

[UltradoomY]

Haven't updated in a bit - been day trading CC's past couple of days.
Take a peek at the C $280's today - I have a little over 2k of that volume!
STO - $0.80 - BTC - $0.40
Going for round 5 now as I just closed another 500 @ $0.43

(totally ok with shares turning to cash for aggressive Puts for next week)

 

[Oil4AsphaultOnly]

Haven't updated in a bit - been day trading CC's past couple of days.
Take a peek at the C $280's today - I have a little over 2k of that volume!
STO - $0.80 - BTC - $0.40
Going for round 5 now as I just closed another 500 @ $0.43

(totally ok with shares turning to cash for aggressive Puts for next week)

As of 10am PST, there's been ~165k of that option traded today. A single retail investor represented over 1% of the ENTIRE market's trading volume. Gosh, those trading fees must be murder?!

 

[ReddyLeaf]

As @Artful Dodger would say: the whole goal today was to tag the 50 SMA. Edit: Today’s low so far is $270.86, close enough for govt work.

 

[UltradoomY]

As of 10am PST, there's been ~165k of that option traded today. A single retail investor represented over 1% of the ENTIRE market's trading volume. Gosh, those trading fees must be murder?!

$1300 per round trip - but I will have to wait to upload to wingman sometime later this weekend to see total inflow.
Not for the faint of heart for sure!

Edit - also the amount of trade notifications in my email from Schwab today is astounding!

 

[Yoona]

I would agree, from a capital efficiency viewpoint, I don't think you can beat BPS/BCS. I love ICs because of their capital efficiency. I have been trading ICs on SPY the last 6 weeks, mainly because I can get more "reps" in with 3 expirations per week, and hone my skills faster. I'm choosing positions with max return on risk average of around 7%.

I am more cautious with TSLA, because of what I consider and ever present risk of quick moves to the upside, so I am still biased to use BPS and sometimes CSPs. I did open a pretty large IC this week though, and that's looking good as of this morning.

i had also been recently thinking about SPY options, are they less volatile from your experience? higher chances of success? pls share a past trade so i can visualize that world, THANK YOU

i also noticed that there are way more SPY traders doing/sharing realtime trading on twitter...

 

[Artful Dodger]

As @Artful Dodger would say: the whole goal today was to tag the 50 SMA

Goal #2, 3, & 4:

• Stay in contact with the Lower-BB
• Ride the Lower-BB until macros reverse
• Ignore macros as required

Wedgies... "Check."

 

[corduroy]

i had also been recently thinking about SPY options, are they less volatile from your experience? higher chances of success? pls share a past trade so i can visualize that world, THANK YOU

i also noticed that there are way more SPY traders doing/sharing realtime trading on twitter...

Sure! The 3 expirations per week open up a whole new world of possibilities. As far as volatility, you are basically trading the whole market macro. So while you don't have to worry about black/white swans of a certain company, macros have been pretty unpredictable lately.

My target goals on entry with these are:

No more than 4 DTE
Max return on risk (MROR): 6%+
Probability of profit (POP): 90%+
.10 delta or less on short legs
Credits: min .60 per contract

Some of my trades last week and this week, these all closed out a max profit with no management:

Last week:

-427/437/-408/398/
DTE: 3
MROR: 7.4%
POP: 89%
Credits: .68

-428/438/-398/388
DTE: 4
MROR: 6.8%
POP: 92%
Credits: .65

This week:

-417/427/-388/377
DTE: 3
MROR: 6.95%
POP: 92%
Credits: .72

-414/424/-388/377
DTE: 2
MROR: 6.8%
POP: 91.5%
Credits: .61

 

[Yoona]

Sure! The 3 expirations per week open up a whole new world of possibilities. As far as volatility, you are basically trading the whole market macro. So while you don't have to worry about black/white swans of a certain company, macros have been pretty unpredictable lately.

My target goals on these are:

No more than 4 DTE
Max return on risk (MROR): 6%+
Probability of profit (POP): 90%+
.10 delta or less on short legs
Credits: min .60 per contract

Some of my trades last week and this week, these all closed out a max profit with no management:

Last week:

-427/437/-408/398/
DTE: 3
MROR: 7.4%
POP: 89%
Credits: .68

-428/438/-398/388
DTE: 4
MROR: 6.8%
POP: 92%
Credits: .65

This week:

-417/427/-388/377
DTE: 3
MROR: 6.95%
POP: 92%
Credits: .72

-414/424/-388/377
DTE: 2
MROR: 6.8%
POP: 91.5%
Credits: .61

wow, that's amazing, thanks! i'm going to research some more and in particular, this guy whom i have been daily following:

https://www.youtube.com/channel/UCVNiVH8UKQXBRr4j3jXUzBA/videos

(i'll stop now before the mods kick me)

 

[Yoona]

today's 9/9 BW is 24% in 2.5 hrs, undecided if closing soon or not

that's it for this week... have a great weekend, guys!

 

[EVCollies]

I'm the proud owner of a bunch of TSLA purchased at 285! Also used my loose change to buy a few at 269.

Sell placed at $899.

that is really, really, really interesting and you got me thinking... daytrading stocks instead of selling options

tsla's true range (high minus low) post-split is $7-$15 (all you need is $1 of that move from low to high)

if you have 1000 shares and daytrade it for just $1 gain a day, that's $1000 x 5 days = $5000/wk income

that's the same as 9/9 -c283.33 x10, 7 DTE with...

1. none of the options stress
2. way, way less fees
3. perhaps a few days faster to profit goal of $5000/wk
4. no positions open overnight
5. none of the OTM% checking

I'm slowly transitioning to BLSH (Buy Low Sell High) by dropping a CSP contract each week resulting in more loose change to test. If just looking for 1-2%, this is almost Brownian motion for TSLA.