Wiki Selling TSLA Options - Be the House

[Max Plaid]

After getting annihilated last year, I'm not as brave as the rest of you. I sold 235CC for next week earlier today for 0.2. Worth more now, but I didn't know if we were going to 180 or 200. These are shares I don't want to sell for less than 400 so I'm being safe. If we get back to 220 soon I will just sell Jan 2024 400CC.

I think you're doing the right thing given all that you went through. Keep it simple, keep it safe, trickle in some profits, get your mojo back

Hopefully goes well, but FFS don't get cocky and think you're some kind of trading god - it happens to us all, a long string of great weeks that we ascribe to our trading prowess, then we overstretch, bet the farm, and have our asses handed back to us on a plate... it's mostly luck, mostly random, but we have a slight bias in our favour as we know the company and the stock inside-out, that small edge does make a difference, but doesn't make us invincible

 

[dl003]

CPI data comes out March 14th, all logic points to inflation dropping dramatically from here onwards, if it doesn't then the numbers are cooked. Not many are understanding this, everyone seems to think inflation is "sticky", I don't. Not advice...

Well...I had to downgrade from jumbo eggs to just XL at Walmart. Feels bad man.

 

[Max Plaid]

Wondering if it might be beneficial to sell x CC/week (or buy x LEAPs) of a certain strike/date to moderate price swings, seems like it would only work over 5-10 weeks for longer term options, e.g., Jun’25$250 might cost $60 a few days ago, $56 now, $65 next week and $50 the week after. Maybe it’s not worth the admin trouble.

I've been selling 45x -c300's at local highs then buying back on the dips, taking ~50% profits each time. It's not enough to "hit my targets", but it's risk-free, stress-free and brings in some beer money

 

[EVNow]

This year I've done

-123/+128 -> -125/+130 -> -143.33/+150 --> -165/+170 --> -175/+190 --> -175/+200 --> -185/+230 --> -185/+225 --> -195/+220

I got caught with the -165/170.

Rolled from 195 to 205. If I had rolled yesterday, I could have rolled to 210. Or if I waited for a few more minutes could have got more credit.

-123/+128 -> -125/+130 -> -143.33/+150 --> -165/+170 --> -175/+190 --> -175/+200 --> -185/+230 --> -185/+225 --> -195/+220 --> -205/+225

 

[Right_Said_Fred]

3/17 $190 is a bit close for comfort given the recent weakness and congestion for TSLA, and macro jitters. Are you seeing something else? (unless you want the shares)

With the negative reaction to Investor Day out of the way - the positives still take a bit of digesting - the market will start looking towards P&D. I don’t feel negative about this month and expect us to trade within the same bandwith as in February (185-215).

But I’m ready to roll if necessary and sell more puts on weakness. I currently don’t want the shares, as I already have enough of those in my non-trading account.

 

[CHGolferJim]

I've been selling 45x -c300's at local highs then buying back on the dips, taking ~50% profits each time. It's not enough to "hit my targets", but it's risk-free, stress-free and brings in some beer money

At like 6 months out, right?

 

[Right_Said_Fred]

I've been selling 45x -c300's at local highs then buying back on the dips, taking ~50% profits each time. It's not enough to "hit my targets", but it's risk-free, stress-free and brings in some beer money

That’s a lot of beer

 

[Max Plaid]

That’s a lot of beer

I like beer - @Cobos and @NicoV can confirm...

 

[ReddyLeaf]

Well, tried something new today. STO 3/3 -c195 at open for $2.20.
You’re welcome. Stupid, I know, but still have ITM BPS that are a total loss, so daring the market up. It worked.

Edit: and, of course, when I finally decide to close the bps for a total loss, the SP jumps because somebody buys 1.1 M shares. I think that it’s time for me to drop out of this stuff. I can’t get a break.

Of course, rolled those out to next week -c200s for a small credit. Also had -c200s sold earlier at $0.50 that were ITM this afternoon. I thought those were easy peasy safe CCs. Again, can’t seem to get a break. Well, rolled those out to 3/10 -c200s for ~$6 cr. Went with same strike because I decided to pair with some nearby BPS. Each account is a little different, but have +p165/-p185s, +p175/-p185s, paired with -cc200s, -c220/+c230s, -c225/+c235s.

Unfortunately, I still have one set of ITM +p210/-p220s rolled out to 3/31 and paired with -c220/+c230s for an IC. The ITM bps (referenced above) was actually sold for enough credit and paired with BCS to generate ICs, such that I only lost 50% on the deal. Definitely paid to learn that lesson.

Finally, decided that there was enough cash to pull back one Jan25 strangle (-c200 and -p190) and resell for 3/10, though it cost $7k. I’m hopeful that I can make back the debit in ~2 months. Right now I’m about 50:50 in 3/10 CCs and Jan24/25 CCs, all nearly ATM. One account has about the same number Jan25 ATM puts, while the other account has almost no puts. This will be a very slow and arduous process to get back out of the hole that I jumped into before January earnings. Once clear, I plan to be much more judicious on CCs.

Hoping for two weeks of $200+/-20 to clear this stuff. GLTA.

Edit: Hourly still showing decreasing RSI and MACD, as the SP topped out 2/16, while stochastic momentum seems to continue on its oscillations. Absent real news, it looks like continuing weakness. Amazing that we closed and hold AH just above $197.50. MaxPain!

 

[Max Plaid]

At like 6 months out, right?

Nope - twice it was 4 weeks out, the last time 8 weeks, as the earlier premiums didn't appeal

I guess this aligns with the Elon philosophy "fail frequently, fail fast", ergo, I'm writing a lot of calls (45x) with a decent enough premium to be interesting (>$1), but with a short enough date that they are very unlikely to go ITM, but are also very sensitive to SP downward moves, so you can close them out early and take the free cash, usually within a few days... if the SP does moon or they go ITM then the DTE is low so the conversion to cash will come quickly and then I can be selling juicy put premiums instead

If all that makes sense...

 

[WattsHappening]

Nope - twice it was 4 weeks out, the last time 8 weeks, as the earlier premiums didn't appeal

I guess this aligns with the Elon philosophy "fail frequently, fail fast", ergo, I'm writing a lot of calls (45x) with a decent enough premium to be interesting (>$1), but with a short enough date that they are very unlikely to go ITM, but are also very sensitive to SP downward moves, so you can close them out early and take the free cash, usually within a few days... if the SP does moon or they go ITM then the DTE is low so the conversion to cash will come quickly and then I can be selling juicy put premiums instead

If all that makes sense...

Interesting play; I like it.

Have you ever had any of these go ITM or at least close enough where you had to make a move (roll the calls)? Or would you just let them get called away? Sounds like you are ok with them getting called. I'm wondering whether it would make sense for me as I really don't want to risk this substantial number of shares getting called away.

 

[gabeincal]

This is a wishful-thinking roll isn't it? If you think "the dip that might never happen", then shouldn't you be planning out a strategy for dealing with it?

Within the universe of possibilities, sure it's possible that TSLA could drop down to 135 between now and April, but if it does NOT, what will happen other than your position being deeper ITM? Wouldn't rolling it out and UP give you more breathing room, and at least gives you a higher strike price if it gets early exercised on you?

Several reasons.

- My primary goal is to make income, right now, every month from my investments
- I truly believe in a pullback, not because of Tesla but macro
- I have the principle of not buying back calls. I got burned too many times.
- There is not a reasonably close target in date where I could roll up even 1 strike. Due to point number 1 above, I cannot wait a year.
- Even if my shares get called away at 135 I’m okay with that, as I would go into short puts, but it would be quite catastrophic to jump into 200p’s and revisit 100 or even lower due to a recession. I’m letting things play out a little longer and getting paid for the wait.
- It doesn’t have to revisit 135. I can safely start rolling up at around 150-160 and hopefully intersect the SP within the next couple months, expiring my short calls and releasing me from my self-induced jail.

Of course this wait might turn out to be completely foolish in a year’s time looking back. Or not.

 

[Oil4AsphaultOnly]

Several reasons.

- My primary goal is to make income, right now, every month from my investments
- I truly believe in a pullback, not because of Tesla but macro
- I have the principle of not buying back calls. I got burned too many times.
- There is not a reasonably close target in date where I could roll up even 1 strike. Due to point number 1 above, I cannot wait a year.
- Even if my shares get called away at 135 I’m okay with that, as I would go into short puts, but it would be quite catastrophic to jump into 200p’s and revisit 100 or even lower due to a recession. I’m letting things play out a little longer and getting paid for the wait.
- It doesn’t have to revisit 135. I can safely start rolling up at around 150-160 and hopefully intersect the SP within the next couple months, expiring my short calls and releasing me from my self-induced jail.

Of course this wait might turn out to be completely foolish in a year’s time looking back. Or not.

I'm a little worried that your point #2 is potentially trapping you into a situation where you can no longer roll the 135c for a credit. Multiple times over the past few weeks, TSLA would drop below 200, only to rise again.

But if you're okay with the shares being called away, then there's nothing more to say.

 

[SebastienBonny]

Rolled from 195 to 205. If I had rolled yesterday, I could have rolled to 210. Or if I waited for a few more minutes could have got more credit.

-123/+128 -> -125/+130 -> -143.33/+150 --> -165/+170 --> -175/+190 --> -175/+200 --> -185/+230 --> -185/+225 --> -195/+220 --> -205/+225

This is a perfect example showing you can get out if a losing position, even when SP has a fast steep rise.
Are these weekly rolls?

 

[Max Plaid]

Interesting play; I like it.

Have you ever had any of these go ITM or at least close enough where you had to make a move (roll the calls)? Or would you just let them get called away? Sounds like you are ok with them getting called. I'm wondering whether it would make sense for me as I really don't want to risk this substantial number of shares getting called away.

Yes, I actually want to sell 4500 $TSLA at 300 or above as I've way too many for comfort, which makes the trade risk-free

But we're talking a 50% rise in 4 - 8 weeks, which is highly unlikely (yes, I know, "January", but I think that was a fake drop to 100 that just needed to reverse)

So I refuse to write these below 300, even though it's tempting and also quite unlikely they'd go ITM, but I can live without that hassle. Each time the sell has been when the SP popped above 210, then the buyback when it dips under 200, or in this week's case into the 180's

 

[OrthoSurg]

Rolled all my -23 x 3/17 135c’s to 4/21 135c’s @ $2.55 credit. Waiting for the dip that might never happen.

Rolled my 6/1 120CCs to February 140CCs then to Jan2025 370CCs. If I hadn’t rolled far up and out as soon as my strike price was reached I would probably still be rolling 140CCs every month out too. Sisnce I don’t need the weekly income I went with the sell shares near all time high scenario which is fine with me. Actually, selling my shares at any level above $100 is a win because at some point I started to believe CGS could be right with his $60 target and was ready to cut the losses at $100 to avoid seeing my account go to 0 if we reached $60.

I don’t know if we will revisit the lows and test them but I feel like every month Tesla sells more and delivers more, it’s less and less likely to happen with a forward P/E decreasing and becoming insanely low.

At least you just have to wait for the pullback that might never happen, I have to act and roll back my CCs ITM if the pullback ever happens, if I want to salvage them.

OT:
My brother-in-law who is an engineer and accumulated over 40k in the last 3 years to buy an EV just test drive a Hyundai Ioniq 5, a Polestar 3, a Mustang MachE because his father who is an accountant told him a 80k car was not a sound financial responsible purchase.

After being told the wait time was 5 years for the Ioniq 5 and reading about the MachE and the last of space of the Polestar, they both ordered a Tesla Model Y yesterday. Blue and Grey.

 

[EVNow]

This is a perfect example showing you can get out if a losing position, even when SP has a fast steep rise.
Are these weekly rolls?

Yes, weekly rolls.

BTW, not the first time I'm rolling weekly and getting out of ITM positions. But these were without any hedging spreads.

1. In early '22 I had a very similar problem from 1/21/22 to 3/11/22. Rolled puts from 990 to 940 and got out after 8 weeks.
2. From 2/26/21 to 4/16/21 I was selling P740 and got out without being able to roll down. Just rolled weekly for same strike.
3. 5/14/21 to 6/18/21 - again rolled weekly but from just P650 to P640.

2 Times got assigned. I'm still in the "red" because of the first assignment. I started using spread as a hedge to be able to successfully get out of DITM positions. Once this round is over I will analyze whether spreads were better or whether just covered calls would have been better (for the same premium).

1. 4/29/22 at P1020 after 3 weeks.
2. 12/30/22 for P165 after just a week !

 

[ReddyLeaf]

Posted TA graph here. As for the next two weeks options front, MaxPain says flattish at $195+/-$5 for 3/10 and then perhaps dropping down, maybe even into the $180s for 3/17. Open interest shows a dividing line right below $200, so maybe just right at the current SP. However, somebody took a pretty big 3/17 p180 bet yesterday, so maybe that’s where we go. Only time will tell. I’m fairly well hedged, with BPS and CCs, but was hoping for a Monday spike to sell some BCS to form the ICs. So, for that reason alone, expect a drop on Monday. As always, GLTA.

 

[MikeC]

I finally cleared all my puts, so now I can focus on the 10x 1/25 -c400 I had to open near the bottom. I'm thinking I will try to split roll one contract forward into 2x NTM strangles each week.

Depending on Monday's open, I'm thinking something like open 2x -p200 and 2x -c202.50 for Friday and close 1x 1/25 -c400.

 

[EVNow]

Posted TA graph here. As for the next two weeks options front, MaxPain says flattish at $195+/-$5 for 3/10 and then perhaps dropping down, maybe even into the $180s for 3/17. Open interest shows a dividing line right below $200, so maybe just right at the current SP.

I’d expect that to be the case, in general. Most people buy calls/puts based on current price. So, we would expect in general a normalized distribution with current SP at the center. I think maxpain adjusts as the SP moves … and only on Friday seems to exert pressure on the price.

Unfortunately @Yoona is not active here .. but,if someone were to check, Friday is perhaps the least volatile day of the week ?