Wiki Selling TSLA Options - Be the House

[CHGolferJim]

The question I'm asking myself over the weekend is what will make $TSLA go up again or perhaps just stop it dropping. Very strong negative sentiment right now, and although the markets have generally been bullish the last weeks, especially tech, we likely have some crappy earnings incoming and lots of recession talk. It all feels very grim

FOMC and rates decision on 3rd May, CPI the week after that - these could pop the wider markets, but would them pull TSLA out of this funk? I'm not convinced...

Price rises, would that reverse things? Perhaps, but TBH it would also make Tesla look amateurish, they need to stop licking about IMO and stabilise things for a while

So then we're waiting for what, CyberTruck order page, surely that's due soon. Next P&D, will it even matter any more - Tesla could sell 500k, but the narrative is now all about margins, need to wait until earnings for that, and then what if they're worse and the EPS is lower...?

I'll be honest, I'm thinking very long and hard about selling some very aggressive calls and letting some shares go, even core shares, I struggle to see any light at the end of the tunnel right now and I'm an Uber-bull, so what are the neutrals feeling? Even if the stock reverses, I don't see it going up fast, would be plenty of opportunity to sell puts with the capital, but I fear it will drop more from here, maybe not plummet, but bleed down slowly

Best case I can think of right now is that mid-160's is the new pivot point

With the pattern that catch up from Fridays and most positive news gets reflected on Mondays, I’m thinking to sto 10% OTM CC for 9 DTE. Maybe ladder in half per week on 20% of shares, seems unlikely there will be a spurt up anytime soon, or at least not enough to make rolls too difficult. Taking this down opportunity to roll out my LEAP calls when possible to limit losses.

 

[ReddyLeaf]

The question I'm asking myself over the weekend is what will make $TSLA go up again or perhaps just stop it dropping…….snip……

……….I'm thinking very long and hard about selling some very aggressive calls and letting some shares go, even core shares……

Unfortunately, once again, you are on the pulse of things. I think the SP will probably bounce around on technicals, until there is serious positive news (CT, higher sales or margins, maybe massive GW-level megapack orders, etc.). My guesses on TA have been poor, at best, but I’m expecting a short reversal, maybe just a small Monday bump, because TSLA printed a dragonfly doji on Friday:

The dragonfly doji is a candlestick pattern stock that traders analyze as a signal that a potential reversal in a security’s price is about to occur. Depending on past price action, this reversal could be to the downside or the upside. The dragonfly doji forms when the stock’s open, close, and high prices are equal. It’s not a common occurrence, nor is it a reliable signal that a price reversal will soon happen. The dragonfly doji pattern also can be a sign of indecision in the marketplace. For this reason, traders will often combine it with other technical indicators before making trade decisions.

I circled a few dragonfly doji’s on the graph below, showing that there are usually Green Day’s afterwards. Unfortunately, I still expect the SP to close the 146-154 gap from January, another TA significant event. Conversely, it looks like we’ve reached a double-bottom, so another TA indicator, likely green ahead.

Sentiment and news articles are extremely negative, TAs are both positive and negative, so what am I doing? I still have -p200s, -c210s, -c400s for Jan2025 outstanding, about 50% of shares uncovered and awaiting a SP bump, a handful of 4/28 ICs +p140/-p160/-c170/+c190, +p140/-p150/-c180/+c190, and a bunch of cash waiting in case I need to react. What will happen? I’m expecting a Monday bounce, a few days of indecision, then a Friday run up into MaxPain. I’m still working through mentally holding TSLA vs just trading options for cash. I still believe in the mission, but the SP and the messenger are making it difficult to HODL. GLTA.

 

[EVNow]

I’m still working through mentally holding TSLA vs just trading options for cash.

Last year I went with trading options for cash - but ended up with shares assigned at high put prices anyway .... Still need SP to go to 250 before breakeven.

Anyway, I'm still waiting for re-entry after letting CC be executed for tax harvesting. 146 is the current TA target .... for various reasons (gap, speed lines, Fibonacci) I see a lot of TA folks believe ~145 to be "a" bottom. We'll see over the next couple of quarters, what happens.

 

[JustMe]

FWIW, According to Gary Black, the average 2023 EPS estimate went down by 9% after earnings, bringing TSLA price targets from $210 to $196. The 10% TSLA drop after earnings is in line with this repricing.

https://twitter.com/x/status/1649808215842988033

 

[adiggs]

I remind myself that flat(ish) isn't all that fun for capital gains and wealth, but for option sales its our ideal environment.

 

[MikeC]

The only thing that makes me scared of a rise right now is that even hardcore bulls (like me) are bearish short to medium term. Otherwise, I’m really not seeing any immediate catalysts.

I’m going to continue selling aggressive calls this quarter until something changes. Will sell less aggressive puts with the cash raised and let them exercise.

These next few months could be an ideal time to increase share count because long-term nothing has changed. Not planning to convert shares to LEAPS unless we drop all the way down to maybe the 120s.

 

[SebastienBonny]

It’s only Belgium, I know, but other countries may follow: I saw several news items being more positive about the way Tesla handles their business right now.

Model Y best selling car isnt’t bad either… But I know margin narrative will stay an issue for WS…

 

[EVNow]

The question I'm asking myself over the weekend is what will make $TSLA go up again or perhaps just stop it dropping. Very strong negative sentiment right now, and although the markets have generally been bullish the last weeks, especially tech, we likely have some crappy earnings incoming and lots of recession talk. It all feels very grim

The only thing that makes me scared of a rise right now is that even hardcore bulls (like me) are bearish short to medium term. Otherwise, I’m really not seeing any immediate catalysts.

As they say history never repeats - it only rhymes.

All this reminds me of 2019 Q1 - when the ER was really bad (and suddenly the demand seemed to have evaporated, Tesla cut prices and Musk tried to sell Tesla to Apple). SP reached a low of ~185 (divide by 15 = 12 for post-post split price).

Then Q3 '19 happened and out of nowhere margin improved and we had first of the many short squeezes.

But as I wrote, history never repeats. It only rhymes

 

[EVNow]

But earnings can still rise with higher sales volume.

That is already built in - analyst estimates for 2023 is 1.8M volume and EPS of 3.61 (vs 4.07 actual in 2022). Basically the volume increase does not cover ASP and margin hit.

The worst part is - the analyst estimates of 0.81 for Q2 is higher than what some of the community analysts are coming up with.

 

[MikeC]

As they say history never repeats - it only rhymes.

All this reminds me of 2019 Q1 - when the ER was really bad (and suddenly the demand seemed to have evaporated, Tesla cut prices and Musk tried to sell Tesla to Apple). SP reached a low of ~185 (divide by 15 = 12 for post-post split price).

Then Q3 '19 happened and out of nowhere margin improved and we had first of the many short squeezes.

But as I wrote, history never repeats. It only rhymes

As bad as 2019 Q1 was, I don’t remember any hardcore bulls being discouraged with the company, only the market reaction. Even though S and X took a hit, Model 3 was ramping up. We all still felt TSLA was ridiculously undervalued and Wall Street was blind.

Right now, I’m seeing more bulls than ever discouraged with the company and questioning leadership/strategy. There’s just nothing to be excited about for the next 6 months until Cybertruck comes out. This is the first time I can remember where I have zero FOMO to buy calls and no real fear of selling calls.

 

[EVNow]

As bad as 2019 Q1 was, I don’t remember any hardcore bulls being discouraged with the company, only the market reaction.

There definitely were a LOT of discouraged bulls. Checkout 2019 market thread.

Tesla was close to running out of cash and as we learnt later got saved by the Fiat deal.

Musk was doing stuff like closing all retail stores one day and going back on the decision 3 days later. The panic was evident.

 

[dl003]

As bad as 2019 Q1 was, I don’t remember any hardcore bulls being discouraged with the company, only the market reaction. Even though S and X took a hit, Model 3 was ramping up. We all still felt TSLA was ridiculously undervalued and Wall Street was blind.

Right now, I’m seeing more bulls than ever discouraged with the company and questioning leadership/strategy. There’s just nothing to be excited about for the next 6 months until Cybertruck comes out. This is the first time I can remember where I have zero FOMO to buy calls and no real fear of selling calls.

I strongly recommend against letting these subjective and anecdotal beliefs influence your trading decisions.

Are there more discouraged bulls than ever? The chart says that we're at about the same spot we were in June 2019. Bounced off after briefly puncturing the 100 MEMA. Ran up sharply before a deep retracement.

Are there nothing to be excited for the next 6 months? Recall that in June 2019, we only had one new GF (Shanghai) and 1 new model ramping (3). Right now we have 2 new GFs (Austin & Berlin), two new models (Cybertruck & Semi), 4680, Optimus and FSD.

The 2019 bear market in TSLA was due to the viability of its own going concerns, or lack thereof. The 2023 bear market has to do with a looming recession of the US economy. Which one is more likely? The prospect of a cash poor company going bust or the collapse of the US economy?

Who is questioning Tesla's leadership & strategy? Not this guy. This ER was just as expected. How is high interest rates and FX fluctuation a problem with leadership? Price cuts were the result of high interest rates, regardless of the current stage in FSD development. If someone was going to question leadership & strategy, they should have done so at 217, or better yet, at 415. Yet, all I heard 6 weeks ago was how we're going to the moon and 250 was in the bag. Don't let your emotions be swayed by the stock price.

I also recommend to learn charting so that you can do the work yourself, instead of surfing Twitter and Youtube for contents to feed your confirmation bias.

I'm of half a mind to stop posting here as I hate letting others' emotions rub off on me. And emotions are running high for sure.

 

[MikeC]

I strongly recommend against letting these subjective and anecdotal beliefs influence your trading decisions.

Are there more discouraged bulls than ever? The chart says that we're at about the same spot we were in June 2019. Bounced off after briefly puncturing the 100 MEMA. Ran up sharply before a deep retracement.
View attachment 931147

Are there nothing to be excited for the next 6 months? Recall that in June 2019, we only had one new GF (Shanghai) and 1 new model ramping (3). Right now we have 2 new GFs (Austin & Berlin), two new models (Cybertruck & Semi), 4680, Optimus and FSD.

The 2019 bear market in TSLA was due to the viability of its own going concerns, or lack thereof. The 2023 bear market has to do with a looming recession of the US economy. Which one is more likely? The prospect of a cash poor company going bust or the collapse of the US economy?

Who is questioning Tesla's leadership & strategy? Not this guy. This ER was just as expected. How is high interest rates and FX fluctuation a problem with leadership? Price cuts were the result of high interest rates, regardless of the current stage in FSD development. If someone was going to question leadership & strategy, they should have done so at 217, or better yet, at 415. Yet, all I heard 6 weeks ago was how we're going to the moon and 250 was in the bag. Don't let your emotions be swayed by the stock price.

I also recommend to learn charting so that you can do the work yourself, instead of surfing Twitter and Youtube for contents to feed your confirmation bias.

I'm of half a mind to stop posting here as I hate letting others' emotions rub off on me. And emotions are running high for sure.

My confirmation bias has always been bullish and it’s only because I’m not finding anything to feed it for the next 3-6 months that I decided to start being aggressive with the call selling.

None of those catalysts you mentioned look to have any short-term upside surprise to me. I remain confident as ever in the long-term story but we’re talking about weeklies and monthlies here. FSD and Optimus aren’t going to move the needle.

Just sharing the rationale behind my current trades, don’t let me get you down. I know people value your input here.

 

[Jim Holder]

I strongly recommend against letting these subjective and anecdotal beliefs influence your trading decisions.

Are there more discouraged bulls than ever? The chart says that we're at about the same spot we were in June 2019. Bounced off after briefly puncturing the 100 MEMA. Ran up sharply before a deep retracement.
View attachment 931147

Are there nothing to be excited for the next 6 months? Recall that in June 2019, we only had one new GF (Shanghai) and 1 new model ramping (3). Right now we have 2 new GFs (Austin & Berlin), two new models (Cybertruck & Semi), 4680, Optimus and FSD.

The 2019 bear market in TSLA was due to the viability of its own going concerns, or lack thereof. The 2023 bear market has to do with a looming recession of the US economy. Which one is more likely? The prospect of a cash poor company going bust or the collapse of the US economy?

Who is questioning Tesla's leadership & strategy? Not this guy. This ER was just as expected. How is high interest rates and FX fluctuation a problem with leadership? Price cuts were the result of high interest rates, regardless of the current stage in FSD development. If someone was going to question leadership & strategy, they should have done so at 217, or better yet, at 415. Yet, all I heard 6 weeks ago was how we're going to the moon and 250 was in the bag. Don't let your emotions be swayed by the stock price.

I also recommend to learn charting so that you can do the work yourself, instead of surfing Twitter and Youtube for contents to feed your confirmation bias.

I'm of half a mind to stop posting here as I hate letting others' emotions rub off on me. And emotions are running high for sure.

Please don’t leave

I learn so much from you so I can do my own charting and make my own plans.

We already lost Yoona who was a valuable voice, and it would be a big loss to lose you too, you’re both very valuable in your own ways.

 

[EVMeister]

I'm of half a mind to stop posting here as I hate letting others' emotions rub off on me. And emotions are running high for sure.

Please ignore that half of your mind! Your posts are very insightful and a great credit to TMC. I don't even trade options, but I find your analysis very useful in helping understand some of the gyrations and expected movements in the stock price.

 

[vikings123]

Lots of posts about selling calls and in general negative sentiment. I will just say the markets can do irrational things. What’s been interesting to me is watching option flow and NOT seeing any big bets on OTM puts. I guess I’m just saying don’t go selling deep ITM calls and wait for green days.

Somebody once told me cash is a position. So in that spirit I have moved to all cash in my IRA and selling “safe” puts. If the stock keeps making new daily lows I will adjust and not going to FOMO if the stock goes up 10% or whatever. Happy to be wrong.

 

[SpeedyEddy]

Closed 165 puts for a small profit. Didn't want to risk waiting till later for full theta decay.

Mine expired worthless (just..)

 

[Max Plaid]

Lots of posts about selling calls and in general negative sentiment. I will just say the markets can do irrational things. What’s been interesting to me is watching option flow and NOT seeing any big bets on OTM puts. I guess I’m just saying don’t go selling deep ITM calls and wait for green days.

Somebody once told me cash is a position. So in that spirit I have moved to all cash in my IRA and selling “safe” puts. If the stock keeps making new daily lows I will adjust and not going to FOMO if the stock goes up 10% or whatever. Happy to be wrong.

Here's a weird anomaly for the August expiry...

 

[mongo]

Here's a weird anomaly for the August expiry...
View attachment 931291

$51.48 at close, $6.40 time value, 0.87 Delta, bullish ~3x leverage?
(Or bearish value protection )

 

[SebastienBonny]

Lots of posts about selling calls and in general negative sentiment. I will just say the markets can do irrational things. What’s been interesting to me is watching option flow and NOT seeing any big bets on OTM puts. I guess I’m just saying don’t go selling deep ITM calls and wait for green days.

Somebody once told me cash is a position. So in that spirit I have moved to all cash in my IRA and selling “safe” puts. If the stock keeps making new daily lows I will adjust and not going to FOMO if the stock goes up 10% or whatever. Happy to be wrong.

Very good advice. Premiums are low right now, so you might be tempted to take higher risks. I prefer going a bit further (2 weeks) for a higher strike and better premium. Of course there are more days til expiry, but if you can sell several contracts, you can alternate.