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Wiki Selling TSLA Options - Be the House
- Thread starter adiggs
- Start date
It was suggested earlier that when a short call is exercised and its shares are called away, to then use the money to buy ATM puts. Is this still true if one needs new shares for a set of short calls for the following week (i.e., wrote staggered weeks on the same shares), or is it better to buy the shares ASAP, ideally on a dip below exercise price?
Asked differently, what's the goal/benefit of buying ATM puts with the proceeds vs shares?
Ty
Asked differently, what's the goal/benefit of buying ATM puts with the proceeds vs shares?
Ty
I’m sure someone more knowledgeable me can answer this better, but the idea of writing ATM puts after assignment of short calls is to play “The Wheel”, the original strategy of this thread. Collecting premium is the main focus of it.
I don’t believe you technically have multiple short calls written on the same shares. You have one contract per 100 covered shares, and if you now don’t have the 100 shares, you have a naked call. These can be very dangerous, especially in a stock like TSLA. Ask me how I know. If you can’t risk a margin call on these naked contracts, then I would buy back enough shares to cover your calls asap.
As a personal anecdote, I would not recommend spreads (BPS, BCS), naked puts/calls, significant margin use to anyone who cannot watch the SP closely and understand/employ various strategies to get out of underwater positions. You will lose a lot of sleep, time, and probably a significant amount of money. Now, if you’re fine with assignment on calls and puts, that’s all good. But it’s very hard to avoid FOMO for us TSLA bulls.
I got out of the Hertz squeeze ok after months of rolling. Did not fare as well with end of 2022. I’ve since lowered my options level trading privileges to keep me from getting in too much trouble. Covered calls and cash secured puts. Don’t chase after losses. Sleep better at night.
Currently have ITM cc ranging from 170-250. Just let CC assign this Friday at 230 so I can sell puts. Will keep rolling when I can, letting others exercise depending on what SP is on any given Friday.
Hmm. Post was longer than I intended. I’ll get off my soap box now. I guess this is what happens when market’s closed! I do appreciate your contributions to this thread (as well as everyone else’s of course) and certainly for encouraging discussion. Thanks!
Thank you. Yes, my mistake was having naked calls enabled and I sold short calls on the same shares staggered weekly $5-$10 apart, with the intention of the contracts expiring OTM, or if they went ITM to then re-buy the shares on Monday for the next week's contract. This might work in boring price action times but---as I'm watching in horror---can quickly become a disaster during a bull run (and has).
So I guess in my particular case I think I need shares vs. selling CSP's that may or may not go ITM and my calls will remain naked. Although on the other hand I can use cash from selling CSP's to buy back some short calls here and there. Maybe need a mix of both
I have 100% margin available and a chunk of cash from 700 shares that were called away two weeks ago, I need to come up with a plan to maximize use of both. Meanwhile I bought 35x +C360 9/15 to hedge/buy delta. I'm not confident that I know what I'm doing and will take week by week.
So frustrating that what could have been an enjoyable bull run is causing so much stress instead!
Thank you. Yes, my mistake was having naked calls enabled and I sold short calls on the same shares staggered weekly $5-$10 apart, with the intention of the contracts expiring OTM, or if they went ITM to then re-buy the shares on Monday for the next week's contract. This might work in boring price action times but---as I'm watching in horror---can quickly become a disaster during a bull run (and has).
So I guess in my particular case I think I need shares vs. selling CSP's that may or may not go ITM and my calls will remain naked. Although on the other hand I can use cash from selling CSP's to buy back some short calls here and there. Maybe need a mix of both
I have 100% margin available and a chunk of cash from 700 shares that were called away two weeks ago, I need to come up with a plan to maximize use of both. Meanwhile I bought 35x +C360 9/15 to hedge/buy delta. I'm not confident that I know what I'm doing and will take week by week.
So frustrating that what could have been an enjoyable bull run is causing so much stress instead!
The rebuying shares Monday strategy doesn't really make sense. If you were going to do that, you might as well rebuy them on the Friday after hours right after the short call exercises - which functionally works out the same as just closing the short call on that Friday and taking the loss.
The problem with your c360s is we might not get there in the next 3 months but that doesn't prevent your short calls from going another $100 deeper ITM.
Have you looked at selling shares and buying ITM LEAPS at a 2:1 or 3:1 ratio? Will give you more positions covered. And/or rolling ITM short calls to LEAP short calls at same strike but reducing # of contracts?
Unfortunately, no way out of this predicament without increasing leverage or taking losses.
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The rebuying of share was only in the case they exercised/were called away. Of course I'd prefer to roll or BTC before.
Re selling shares and buying ITM LEAPS at a 2:1 or 3:1 ratio, and/or rolling ITM short calls to LEAP short calls at same strike but reducing # of contracts, I'll study this. I don't know much about LEAPS and how to choose targets.
Not sure if TSLY (YieldMax TSLA Option Income Strategy ETF ) has been discussed here or not. Can someone check out the holding and explain how the ETF is yielding nearly 50% and not holding much of TSLA options? Not sure how its holding a vast majority of USA Treasury notes.
Looking to have some money in this as it 'seems' to be doing what I'm looking for with TSLA options- yield/income replacement. I would love the hands off approach and getting a nice yield.
TIA
Looking to have some money in this as it 'seems' to be doing what I'm looking for with TSLA options- yield/income replacement. I would love the hands off approach and getting a nice yield.
TIA
I've put a tiny amount into tsly and have been watching it this year. From what I've read they buy long dated calls and sell short dated calls and puts 10-15% otm. Over the last 6 months I've observed that it tends to be less volatile than Tsla while providing a monthly dividendNot sure if TSLY (YieldMax TSLA Option Income Strategy ETF ) has been discussed here or not. Can someone check out the holding and explain how the ETF is yielding nearly 50% and not holding much of TSLA options? Not sure how its holding a vast majority of USA Treasury notes.
Looking to have some money in this as it 'seems' to be doing what I'm looking for with TSLA options- yield/income replacement. I would love the hands off approach and getting a nice yield.
TIA
Right - my point is just that rebuying shares at a loss after exercise works out the same mathematically as just buying back the option at a loss right before it exercises. Doesn't really make sense to wait until Monday - just close the option Friday if you know you definitely need the shares for another contract. But it's not a strategy to repair positions, it's just accepting the loss.
Nothing too difficult about choosing targets. No one knows what's going to happen, so there is no "right" choice. The main goal for you would be simply to get more calls that are later in expiration and lower in strike than your ITM short calls. You write about "needing shares" but LEAPS will get you more coverage for cheaper than buying shares outright.
For example, you would sell 100 shares and net $26k. With that $26k, you could buy 3x 1/24 200 for about $24.5k. Now you have 3x the number of long positions to back your short calls.
I don't know your current short positions, but similarly on the put side, say you had some 6/30 -c220 that you didn't want to exercise. Buy 2 back for $41 and sell a 6/24 220 for $81. You'll almost certainly be selling 100 shares at 220 next year, but that's probably better than selling 200 shares this year.
If you do the above, you will have half the short positions and 3x the long positions. Of course, adjust the timing and strikes to your preference and need. The main goal is just to leverage up your long positions to match your overweight short position.
Don't forget about capital gains if you are in a taxable account when thinking about selling shares to buy Leaps (unless you have losses to offset it). I would get killed on the conversion.
For those of us hoping for a dip… 
SebastienBonny
Member
Lol, that amount won't make a differenceFor those of us hoping for a dip…
Lol, that amount won't make a difference
Lol. Here’s another:
/cloudfront-us-east-2.images.arcpublishing.com/reuters/HI4HPWFEPRJSXEPESZ6FT2QYPE.jpg)
Hyundai to consider joining Tesla's North American charging standard alliance
Hyundai Motor will consider making its vehicles more readily compatible with the charging standard Tesla is pushing for in North America, the South Korean automaker's CEO said on Tuesday.
www.reuters.com
willow_hiller
Well-Known Member
Lol, that amount won't make a difference
The headline is missing the context that TSLA was down about 1.0% prior to the news. So a premarket swing of about +1.5%.
Just happens this youtuber explains YieldMax but on NVDA after my original post. The fund is creating a synthetic position and not actually holding the shares. The fund sells weekly calls like us. Majority of the fund are in 'safe' treasury. Hope this helps someone too.Not sure if TSLY (YieldMax TSLA Option Income Strategy ETF ) has been discussed here or not. Can someone check out the holding and explain how the ETF is yielding nearly 50% and not holding much of TSLA options? Not sure how its holding a vast majority of USA Treasury notes.
Looking to have some money in this as it 'seems' to be doing what I'm looking for with TSLA options- yield/income replacement. I would love the hands off approach and getting a nice yield.
TIA
For those of us hoping for a dip…
Tesla stock went up in Frankfurt so I expected it to go up here today too. But I think that correction is coming soon. Just offloaded a bunch of shares at $260. Will sell more at $270. Not sure about timing so not buying any puts at this point…
I'm still trying to get 3,000 shares back. Sold -265 Puts for Friday. The problem is the cost basis on the shares now stands at 209, so if the SP keeps going up I'm screwed. If it drops too fast I'm screwed.
In addition to the good news of everyone joining the Tesla charging standard, Tesla China had another strong week of deliveries, so a record quarter in China all but assured at this point.
Deliveries will keep going up but margins won’t be able to keep up. Price cuts and inventory discounts are going to eat into profit this quarter. I would check the inventory thread and the quarterly forecasts thread for the latest news and analyses.
BTC 20x July -c200 -> STO 16x October -c200 + 4x December -c300 = small net profit
119x -c200 remaining... going to roll these out over the coming weeks, too risky to do in one go as I need separate buy and sell orders, so 20x at a time and it takes time and energy, so will spread them out
119x -c200 remaining... going to roll these out over the coming weeks, too risky to do in one go as I need separate buy and sell orders, so 20x at a time and it takes time and energy, so will spread them out
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