Wiki Selling TSLA Options - Be the House

[MikeC]

advise requested:
I have 4000 shares, an on Friday 4/19 I sold 40x (does x mean "contracts" in this forum?) $143 covered call for $9.2, hoping that at least if the SP goes to $139 I am still break even, or above $143 and it is still equivalent to selling at $152.
However, during the weekend the $2000/14000 RMB price cut news is considered negative, and today SP closed at $142.
That is way more fast than I expected. And even in this forum people are saying $130 is coming, $120 is coming.

Should I stick to my original plan or just close CC and sell everything?

Depends what your goals are here. I would personally take some profit, it doesn’t have to be all or none.

If you want downside protection, long puts would be more profitable than calls without giving up upside on the shares. You just have to pay for them, instead of getting paid to sell covered calls.

 

[Yoona]

the catch is this is a stock that routinely goes up / down 150-200 a day. keep at it long enough and one day you will realize its premiums are exactly as they should be. Whats there to prevent another 20% down day where $73 will only cover half the loss on the shares? it has happened twice in the last 2 months.

you are right again, that's the risk: 73 is not guaranteed until it's realized gain

thanks

Depends what your goals are here. I would personally take some profit, it doesn’t have to be all or none.

good point, it doesn't have to be all or none

 

[intelligator]

the catch is this is a stock that routinely goes up / down 150-200 a day. keep at it long enough and one day you will realize its premiums are exactly as they should be. Whats there to prevent another 20% down day where $73 will only cover half the loss on the shares? it has happened twice in the last 2 months.

Exactly why I will shutdown this last SMCI spread this AM, small loss.is.okay. Volatility
of this beast is real, +/- , it's a severe drain when - ... careful peeps!

 

[traxila]

Tesla earnings calls are always a crapshoot due to our favorite CEO.

But I cannot recall a recent one where so much depends on what he says for the short term SP. The stock is primed for a vicious short covering rally. It also appears ready to test 100.

Buy the cheapest options you can find 20% out in either direction for next week? Of course, at that point he will make tepid remarks and projections that allow the SP to go flat for a while lol.

Gamblers only it seems.

 

[Max Plaid]

Tesla earnings calls are always a crapshoot due to our favorite CEO.

But I cannot recall a recent one where so much depends on what he says for the short term SP. The stock is primed for a vicious short covering rally. It also appears ready to test 100.

Buy the cheapest options you can find 20% out in either direction for next week? Of course, at that point he will make tepid remarks and projections that allow the SP to go flat for a while lol.

Gamblers only it seems.

Yes, it's a horrible scenario right now. All logic says down below 100, but with all the manipulation of the stock, who knows...

For my side I'm thinking strongly to jump back in on some short puts for this week, reopen the the -p140's I closed yesterday to straddle with my calls and play the IV crush

As noted, so much betting on the downside that maybe "they" will keep it flat for OPEX this week, then let it drop next

I'm still scratching my head why the stock hasn't crashed yet

 

[EVMeister]

I'm still scratching my head why the stock hasn't crashed yet

Depending on the time frame you're looking at and expectations, it already has.

 

[Max Plaid]

Depending on the time frame you're looking at and expectations, it already has.

No, by crash I mean capitulation down below 100, like we saw end 2022 - back then it was not merited, right now it is. Based on the current situation the stock price is quite over-valued

Yes, I agree that FSD could become a huge cash-cow, but I think that will take a coupe of years to play out yet, assuming it does

 

[vikings123]

Yes, it's a horrible scenario right now. All logic says down below 100, but with all the manipulation of the stock, who knows...

For my side I'm thinking strongly to jump back in on some short puts for this week, reopen the the -p140's I closed yesterday to straddle with my calls and play the IV crush

As noted, so much betting on the downside that maybe "they" will keep it flat for OPEX this week, then let it drop next

I'm still scratching my head why the stock hasn't crashed yet

I think you answered your own question. The stock hasn't crashed for the same reason it did not crash after P&D numbers. There were too many people betting on puts one or 2 weeks out and they had to keep it flat to kill those puts.

I converted my long puts into calendar spread yesterday selling Aug and Jan 25 puts strike price 120$. We will see if there is a short covering rally at some point today to help position me for more downside.

 

[Max Plaid]

I think you answered your own question. The stock hasn't crashed for the same reason it did not crash after P&D numbers. There were too many people betting on puts one or 2 weeks out and they had to keep it flat to kill those puts.

I converted my long puts into calendar spread yesterday selling Aug and Jan 25 puts strike price 120$. We will see if there is a short covering rally at some point today to help position me for more downside.

Well fortunately my puts are July expiry, so I can wait-and-see a bit more yet, but I feel some -p130's for this week might be a good risk/reward

 

[UncaNed]

Timing is everything (obviously). 2019 tsla was in a nose dive so much so that I dipped into buying options for the first time since accumulating tiny amounts of tsla starting in 2014. My initial leap was purchased for I think $2000. As tsla continued to dive I ended up buying two more of the same leap for about $200 each. Fast forward and at expiration those 3 leaps were worth over $250k.

It's important to formulate when to purchase, but the other half of the equation is to formulate when to sell and have a system in place that you're comfortable with. Whether it's technical indicators, trailing stops, or profit taking at certain percentage gains, a system is what protects us from our ego's and hopes of riches

Likewise, my first experience with options was in 2019-2020; I lucked out buying LEAPS at the best time ever, saw them rocket far beyond my wildest expectations, then let them trickle back down to a fraction of their highest value.

I didn't know, nor did I fully understand the critical importance of knowing just when to fold them, in retrospect, I guess I almost thought they'd go up forever.

 

[ChiefRollo]

I think you answered your own question. The stock hasn't crashed for the same reason it did not crash after P&D numbers. There were too many people betting on puts one or 2 weeks out and they had to keep it flat to kill those puts.

I converted my long puts into calendar spread yesterday selling Aug and Jan 25 puts strike price 120$. We will see if there is a short covering rally at some point today to help position me for more downside.

At the risk of being redundant, selling puts (to complete your calendar spreads) or buying calls are bullish moves by themselves; either would make sense if you think SP will move up from here. If you expect further downside, there will be a better time to complete the spreads.

 

[vikings123]

Well fortunately my puts are July expiry, so I can wait-and-see a bit more yet, but I feel some -p130's for this week might be a good risk/reward

I'm eyeing 135$ puts 2 weeks out so May 10th expiry. You are paying 1$ in extra premium per week which I think is worth it.

 

[intelligator]

I'm eyeing 135$ puts 2 weeks out so May 10th expiry. You are paying 1$ in extra premium per week which I think is worth it.

I have -p130/+p140 for this week which are green as a set. Seems SP is being propped, some. Thinking of cutting them loose, take profit, reset.

 

[CHGolferJim]

Well fortunately my puts are July expiry, so I can wait-and-see a bit more yet, but I feel some -p130's for this week might be a good risk/reward

Might roll half of 26Apr$155 to twice as many 26Apr$162.50 for some cushion in case of an ER spike, still expecting a drop. This would raise % of shares covered from 70% to 85% through Friday when 40% should expire, so still some reserve in case have to rescue the remaining $155.

 

[elasalle]

Yes, it's a horrible scenario right now. All logic says down below 100, but with all the manipulation of the stock, who knows...

For my side I'm thinking strongly to jump back in on some short puts for this week, reopen the the -p140's I closed yesterday to straddle with my calls and play the IV crush

As noted, so much betting on the downside that maybe "they" will keep it flat for OPEX this week, then let it drop next

I'm still scratching my head why the stock hasn't crashed yet

YTD we down like 42%. Aren't we in oversold territory?
(of this what % is based on fundamentals, macro and FUD) - 15% fundamental, 12% macro, 15% FUD ?

( I too keep having thought of selling my shares in personal ..., not sure, confidence has been shattered. (new China numbers bad as well) ) Maybe best is to buy some PUT insurance

+~ $3K in insurance - 10 July 100 puts for ~2.5, +10 jan 25 50 PUTS for ~ $1 .. hope they are *sugar* puts and SP doesn't fall this far ... but who knows where the winds blow ...

 

[BornToFly]

I decided to go ahead and buy protective spread for next week on the pop. -130/+140P.

 

[juanmedina]

I decided to go ahead and buy protective spread for next week on the pop. -130/+140P.

how much were they?

 

[BornToFly]

how much were they?

$3.30
Potential for $6.7 gain.

I did next week because in the previous two ERs, we bottomed about 10 days after ER, and then the SP went back up.

 

[BornToFly]

If we get close to 150 before end of day, I will sell more CCs.

 

[Discoducky]

a lot of $150 puts tells me there should be a push to finish today there