Which expiration? I’m assuming for 10/6. I would be very careful about selling puts before P/D. Historically, TSLA usually drops for about two weeks after P/D and then rises the last few days into earnings. Everyone seems to be expecting a significant miss, so maybe it’s different this time and we rise afterwards.
I know that you are hedged by the +p LEAPS, but why take such chances against so few short term CCs? Maybe sell 20x -c240s and 40x-60x -p240s, holding some extra in reserve in case the SP heads south. Even if there’s a SP jump, you still have a few days left and can sell the remaining puts at a slightly higher strike to collect some premium.
I don’t know, maybe I’m just getting scared by last quarter. Still, you are dealing with way more risk than I am, and I’m hesitant to sell more than a few puts here. I’m like 10:1 CCs to CSPs, plus a handful of ICs (rolled from the FOMC fiasco). Definitely weighted more to benefit from a SP drop. I might not even sell 1-2 DTE ICs this week because of the risk of losing one side before the P/D. Given the anti-ReddyLeaf indicator, perhaps the SP will now jump into the 300s next week.
Yeah, 10/6, and yes, I'm sure it will drop, hence I keep 100x contracts free to help the roll down, and I did also think about writing less puts, need to do some modelling. In any case, I don't want to sell the long puts just yet, I bought them with March strike to give insurance until then, even though I think TSLA will recover, maybe it won't, look what happened last year after Q3, we went into a death-spiral down to 100, could happen again, so I want to be covered for that
And don't forget, even if P&D is not as bad as expected, then we'll have three weeks of margin worry in the media...
I'm going to have to start doing this. Spend money to make money.... What do you mean by 50/50 price points?
Yeah, buying puts is against my religion, but using them as a trading mechanism works well. My only regret is buying them last week, should have picked some up when we were nudging 300 when they would have cost almost nothing - this is something I will bear in mind next time we get a rally
And this is one of my observations, at least in this current market. Buy LEAP calls in the big dips, sell them on the pop and buy LEAP puts, sell against them when sideways - going to try this with a few positions
We're all into converting shares to LEAPS when the SP dumps, because we're mostly TSLA bulls, but as a result we tend to ignore the same trade in the other direction
Edit: by 50/50 that's how I judge the possibility of the SP closing below 240 or above 240 at the expiry date - yes P&D is almost certainly going to be a "miss", but this Should not come as a surprise, has been flagged a long time now, even by Tesla in Q2ER, of course if it's a bigger "miss" than expected, that's another matter, and "expected" is an imaginary number made up by Wall Street to serve their purpose
16x 9/29 -p270 assigned overnight! A little surprised as there was still around 20c extrinsic, but the Bid/Ask was very wide at close 24.90 - 26.50
Will add those 1600 stares to my -c240 write and there'll the remaining 4x -p270 down to -p240
