Wiki Selling TSLA Options - Be the House

[Jim Holder]

https://twitter.com/x/status/1744943097950183426

• No price increase. Despite all the upgrades the prices are the same as before.
• Not eligible for tax credit
• Deliveries of the new Model 3 in the US will begin by the end of this month (January).
• You get 8 more miles of range (341) on the new Long Range trim vs the old LR trim (333).
(Per Sawyer)

 

[MP3Mike]

• You get 8 more miles of range (341) on the new Long Range trim vs the old LR trim (333).
(Per Sawyer)

But isn't that 8 more miles under the new EPA rules, meaning the actual difference is larger?

And just like in China, there is no longer a Performance Model 3, that everyone was assuming would still qualify for the tax credit and cause pricing issues.

 

[Jim Holder]

 

[Singuy]

Thanks for the reply guys. I was curious and wanted to pick your brains if there's something in the chart that you saw that resulted in a short but wanted to know if you guys really follow the companies as well before making such decisions.

Seems like the "short positions" if anything are very short term gambles which with increase volatility in semi stocks lately can go either way. No one actually have a long term bearish thesis here from what I can tell.

Disclaimer: I do follow the companies very closely but I don't follow their charts at all, and do have a 7 fig position in AMD in shares so the reason for my question (and are always looking to see if I should start selling some CC).

 

[Max Plaid]

Thanks for the reply guys. I was curious and wanted to pick your brains if there's something in the chart that you saw that resulted in a short but wanted to know if you guys really follow the companies as well before making such decisions.

Seems like the "short positions" if anything are very short term gambles which with increase volatility in semi stocks lately can go either way. No one actually have a long term bearish thesis here from what I can tell.

Disclaimer: I do follow the companies very closely but I don't follow their charts at all, and do have a 7 fig position in AMD in shares so the reason for my question (and are always looking to see if I should start selling some CC).

Worth noting that NVDA options volumes are huge right now, so perhaps a lot of the SP rise is MM's hedging...?

I'm not touching it myself, don't know the stock or the company, would be pure speculation, which I'm not really into

 

[thenewguy1979]

Seem we pumping Tommorow. Get ready…

 

[Max Plaid]

Seem we pumping Tommorow. Get ready…

You think? I don't. My evidence of this is TSLA constantly not joining the bullish price action compared to the other M7 stocks - seems EV stocks are being beaten-up and TSLA is ftrending with those rather than tech

All setting up for the big OPEX on the 19th I think, then earnings, we'll see after that, and this will mostly be dependent on automotive margins and 2024 outlook

TSLA will pop when you don't expect it, most likely out of synch with other stocks and when everyone has gradually moved their short calls closer ATM to make up for the crappy, low premiums, then we'll get steam-rollered

That's the way it goes, always

 

[Oil4AsphaultOnly]

Thanks for the reply guys. I was curious and wanted to pick your brains if there's something in the chart that you saw that resulted in a short but wanted to know if you guys really follow the companies as well before making such decisions.

Seems like the "short positions" if anything are very short term gambles which with increase volatility in semi stocks lately can go either way. No one actually have a long term bearish thesis here from what I can tell.

Disclaimer: I do follow the companies very closely but I don't follow their charts at all, and do have a 7 fig position in AMD in shares so the reason for my question (and are always looking to see if I should start selling some CC).

I sell covered calls against ALL of my holdings (like AGNC, which are low volatility dividend paying stock). Those covered calls simply have to be over a few months out to be OTM enough to be considered "safe". The returns aren't that great, but it's essentially free money.

"Wouldn't putting that money into a higher return stock like TSLA/NVDA/AMD be more profitable"? MAYBE! That's what 2022 has taught me, so a little di-worsification is just the price to pay for the insurance.

 

[Max Plaid]

I sell covered calls against ALL of my holdings (like AGNC, which are low volatility dividend paying stock). Those covered calls simply have to be over a few months out to be OTM enough to be considered "safe". The returns aren't that great, but it's essentially free money.

"Wouldn't putting that money into a higher return stock like TSLA/NVDA/AMD be more profitable"? MAYBE! That's what 2022 has taught me, so a little di-worsification is just the price to pay for the insurance.

Over the holidays, when I had some free time, I snooped around the premiums on other stocks. Not very scientific, but I just took the cost of a weekly ATM straddle as a %age of the share price - ROIC, essentially

I didn't find anything that gave as big a bang for the buck - NVDA is the obvious competitor right now, but: TSLA 1/19 -235 +12.25 versus NVDA 1/19 -530 +14.25

Even without getting the calculator out, you can see that TSLA is paying almost 2x the premium of NVDA, and this during a period of low IV

 

[Jim Holder]

https://twitter.com/x/status/1744969170091954257

 

[Max Plaid]

Coming back to the roll of -p270 from Dec 2025 to Jun 2026 that I made on Monday for a relatively small cost, I note that there's a similar situation for +c200, mid for 2025 is $$86.45, June 2026 $93.50 -> the only issue is the low volume and OI with June 2026 so there's a wide Bid/Ask which may make getting any orders executed a bit tricky as a "market order" would certainly be unfavourable

On another latter, I am itching to replace those Dec 2025 +c200 LEAPS with shares and am thinking to buy 2000 TSLA sooner rather than later. To facilitate this a 1/26 -ATM straddle looks interesting, either -235 or -240, everything around these strikes paying +$20 for the straddle, so that's a net price of $220 or good money if the SP goes nowhere

 

[Singuy]

Worth noting that NVDA options volumes are huge right now, so perhaps a lot of the SP rise is MM's hedging...?

I'm not touching it myself, don't know the stock or the company, would be pure speculation, which I'm not really into

Imo these companies are being re-rated, hence the violent rise. Much like Tesla in 2020 when it became profitable, the semi TAM due to AI drastically increased. AMD Ceo, the most conservative in the industry who actually frustrates shareholders for always guiding conservativatively said AI TAM increased from 150B to 400+B by 2027. 400B X 40% operating margin X PE of 30 is 4.8 trillion dollars worth of market cap. There are only 2 players in this space, Nvidia and AMD. Nvidia taking the the lion share. Ai rev today is about 35B a year, Nvidia getting like over 90% of this rev.

So simple napkin math puts AMD's MC at 1 trillion in 3 years and Nvidia over 3 Tril.

 

[mongo]

https://twitter.com/x/status/1744969170091954257

It really bugs me when people claim the clear language of the legislation is a "loophole"...
The lease credit is a separate section of the code under Qualified Commercial Clean Vehicles, not a loophole/ logic flaw in the normal Clean Vehicle Credit...
/rant off

 

[Knightshade]

https://twitter.com/x/status/1744969170091954257

LOL at Troy just "discovering" a "loophole" that's been in the law since it was originally passed a couple years ago and was written about pretty extensively throughout that time....

The problem is Tesla still doesn't allow lease buyouts. Since the IRA credits came into law what folks have done on other brands is lease to get the $7500 when they otherwise would not, then immediately buy out the lease.

Tesla doesn't let you do that.

 

[mongo]

LOL at Troy just "discovering" a "loophole" that's been in the law since it was originally passed a couple years ago and was written about pretty extensively throughout that time....

The problem is Tesla still doesn't allow lease buyouts. Since the IRA credits came into law what folks have done on other brands is lease to get the $7500 when they otherwise would not, then immediately buy out the lease.

Tesla doesn't let you do that.

Immediately buy out the lease???
A lease whose terms are highly preferential toward purchasing doesn't qualify under QCCVC...

Q6. What factors are used to determine if a transaction is a “lease” for tax purposes? (updated February 3, 2023)

A6. Based on longstanding tax principles, the determination whether a transaction constitutes a sale or a lease of a vehicle for tax purposes is a question of fact. Features of a vehicle lease agreement that would make it more likely to be recharacterized as a sale of the vehicle for tax purposes include, but are not limited to:
• A lease term that covers more than 80% to 90% of the economic useful life of the vehicle
• A bargain purchase option at the end of the lease term (that is, the ability to purchase the vehicle at less than its fair market value at the end of the term) or other terms/provisions in the lease that economically compel the lessee to acquire the vehicle at the end of the lease term
• Terms that result in the lessor transferring ownership risk to the lessee, for example, a terminal rental adjustment clause (TRAC) that requires the lessee to pay the difference between the actual and expected value of the vehicle at the end of the lease. (Note that special rules exist under § 7701(h) for qualified motor vehicle operating agreements that contains a TRAC.

 

[Yoona]

1/12 2DTE 68% Probability = 227.15-242.77 based on last night's options premiums @ 52.12% IV. Tighter guess = 230.24-239.68.

 

[dc_h]

Imo these companies are being re-rated, hence the violent rise. Much like Tesla in 2020 when it became profitable, the semi TAM due to AI drastically increased. AMD Ceo, the most conservative in the industry who actually frustrates shareholders for always guiding conservativatively said AI TAM increased from 150B to 400+B by 2027. 400B X 40% operating margin X PE of 30 is 4.8 trillion dollars worth of market cap. There are only 2 players in this space, Nvidia and AMD. Nvidia taking the the lion share. Ai rev today is about 35B a year, Nvidia getting like over 90% of this rev.

So simple napkin math puts AMD's MC at 1 trillion in 3 years and Nvidia over 3 Tril.

FYI: I wasn't following thread closely. I am long AMD and not shorting. Their valuation is behind NVDA, by some measures, and they are Nvidia's primary competitor in the AI market space.

 

[elasalle]

Thanks for the reply guys. I was curious and wanted to pick your brains if there's something in the chart that you saw that resulted in a short but wanted to know if you guys really follow the companies as well before making such decisions.

Seems like the "short positions" if anything are very short term gambles which with increase volatility in semi stocks lately can go either way. No one actually have a long term bearish thesis here from what I can tell.

Disclaimer: I do follow the companies very closely but I don't follow their charts at all, and do have a 7 fig position in AMD in shares so the reason for my question (and are always looking to see if I should start selling some CC).

.. NVDA ..
tasty trades ..
default assumptions on this thread should be "people talking weeklies"
small positions ..(not betting the farm)
selling shorts definitely driven by current SP rise like 10% in 1st 10 days of Jan
NVDA phases .. gaming ..bitcoin mining and now in AI phase (thank you to chatGPT). However as with all FOMO -- at some point market will have overreacted and SP will not be in line with fundamentals ... when who knows ... but starting to nibble is one option to take
Closed couple of MSP(Margin Secured Puts) because of the sudden rise. Let's see how the short verticals do ...
Basic Fundamental, market, TA analysis and entity pulse all used intrensically to make a decision - goal is to make money always (even if just .1 c)
1st goal is to make money on the trade, on a loss, goal switches to learn from your mistakes, play options gymnastics, scaffolding(other positions to recover losses on a specific trade) etc etc.
(Almost 99.95% TSLA, but the .05% is on other names based on market pulse ... )

+ All my TSLA stocks right now have a Jan 2024 500 CC against for around $7. it worked out to be at around 0.03delta and 0.13 cents/week. For the knowledge and effort folks doing 0.08-0.1 delta per week around 0.40-0.50cents on average is what it looks like. Around June I should be able to roll CC's to 420-450, if SP still down, or roll to Jan 2025 is SP goes up big.
+my yearly CC's are against all my shares, I don't think anyone selling weeklies will sell .1 delta CC against all their shares .. . But with the $ not in shares, they are selling CSP etc to make more $$

cheers!!

 

[Knightshade]

Immediately buy out the lease???
A lease whose terms are highly preferential toward purchasing doesn't qualify under QCCVC...

There's nothing "preferential"

Buying out a lease is a pretty standard thing for everyone but Tesla.

 

[Jim Holder]

Coming back to the roll of -p270 from Dec 2025 to Jun 2026 that I made on Monday for a relatively small cost, I note that there's a similar situation for +c200, mid for 2025 is $$86.45, June 2026 $93.50 -> the only issue is the low volume and OI with June 2026 so there's a wide Bid/Ask which may make getting any orders executed a bit tricky as a "market order" would certainly be unfavourable

On another latter, I am itching to replace those Dec 2025 +c200 LEAPS with shares and am thinking to buy 2000 TSLA sooner rather than later. To facilitate this a 1/26 -ATM straddle looks interesting, either -235 or -240, everything around these strikes paying +$20 for the straddle, so that's a net price of $220 or good money if the SP goes nowhere

Curios how red to you allow -Ps to get before looking to flip to -C or roll the -P out?

I have a medium-term set of 15x -P290 9/20/24 which is currently about 17% red (STO when SP ~$245). I'm holding out for a pop to $255-$300 between now and expiration to BTC for modest gains or just hold to springtime 2024 (60-90 days out to expiration) to revisit if needs rolling or let expire. My concern is if we dump to $180 in between no reason to hold a red position that will get redder through that.

(The -C300 9/20/24 I has as a combo with that I already BTC for nice profit and will re-STO on next apex.)