TSLA options portfolio case study 2022

[CLK350]

I 've been dabbling in option trades, mostly CC's and a few bullish calls - lost some $ back in Fall 2019 but made it back and more early 2020 thanks to parts of failing CC's I'd rolled over ... I also haven't gone far enough into the Free Options Trading Course from Option Alpha | Option Alpha recommended by @adiggs in the excellent Selling Options - Be the House thread. One of my strongest new year resolutions ;D

Anyways, back a few months earlier I posted a question on that Be the House Thread, and got some excellent advice re my 03/18/2022 1600 C (March call) not being a great idea, advising rather June calls - advice which I promptly followed, selling some Jan 21 calls and buying a 06/17/2022 C call replacement. This turned out OK, tho of course the Jan calls did return very high profits (had I kept them *AND* sold them at the right time of course easy to say in hindsight), and the March call went into the red, resurfacing in the green on Mega Monday of course.

At this point I'm learning with one of my IRA (& ROTH IRA now accounts), leaving the main stocks mostly in my taxable accounts alone.

So in order to be more disciplined, keeping track, and motivating myself - also helping others learn, hopefully less from my mistakes than better trades, I'm publishing here my current status, and trades, not guaranteeing consistency. Uh I have other day jobs too

So this is as of Monday Jan 3 2022 first trading day of the year, starting with a bang as we all saw, SP +13% on stunning 4Q deliveries report.

Here's my ROTH

And my IRA which has mostly short calls and a couple symbolic TSLA for reference - I moved most of my safe trades to the ROTH in December as I figured I may as well pay the taxes on the lower valued assets.

I don't expect comments on this thread, altho I'd definitely welcome them. I will ask smallish-er questions in the Be The House (BTH) thread, pointing to this thread for reference.

My goals are to try and aggressively trade for faster growth than with straight TSLA's - I'm confident in Tesla's ability to continue to execute and innovate to I don't mind 50% draw downs as happened recently. 50% would be the limit tho, as lower and it would make comebacks more difficult, I think

Right now I see that with time decay growing fast, I need to do something ASAP re my Jan Calls - Meantime there was a morning bump today Tue Jan 4, followed by a sharp push down, so there I missed it - TBH I was expecting more upswing thru the week, till at least Fri when Elon is expected to announce Giga Texas production starting. Should know better, tho, b/c the SP rarely moves on announcements other than solid numbers that translate into earnings - remembering the Battery Day and AI day major unveils that drew a blah from the markets (moved by the FUD as usual) .

Immediate goal is to stabilize my situation with minimum risks on the downside as I feel I have been foolishly too late on selling these high volatility short calls vs more reasoned trades. After that I could resume short horizon learning trades depending on how I expect the SP to behave short/ medium term.

Today Tue Jan 4 11:52 all these options are in the red, definitely not as pretty as yesterday's greens - let's see what a good strategy is

Thinking out loud, I better start a Wingman Trade tracker to keep track of all trades, as well as a paper trading account (w/ my IBKR account for example, or maybe ThinkorSwim)

Update: 13:20 - not dealing w/ more tricky Jan 975 call - since I already have that Mar leg, may as well see if I can make a few bucks, on it - $1600 no too likely and I could buy it back too.

Update 2 14:15 Alright - this was a learning trade, to check how liquid it is - will pocket the $580 gain, good for a lunch

 

[adiggs]

My goals are to try and aggressively trade for faster growth than with straight TSLA's - I'm confident in Tesla's ability to continue to execute and innovate to I don't mind 50% draw downs as happened recently. 50% would be the limit tho, as lower and it would make comebacks more difficult, I think

Much goodness here but my first thought is regarding this bit. My initial reading of this sounds a lot like "my goal is to have my cake and eat it too"

The way I see it, which doesn't make me right but it is how I approach things, is that when you're attempting to get different results from simply holding TSLA shares, then you're risking something in order to gain access to a reward you would not otherwise have access to. That doesn't mean you'll achieve the reward.

As an example my goal is income / dividend like income from owning and following TSLA. The nature of the beast is that whether selling puts or calls is that I'm risking something in order to acquire that income. On the call side a conscious and intentional risk I take on is the opportunity cost of having sold covering calls and then watching the shares head off to the moon. In my circumstance if those covered calls result in me earning $200 / share when I could have earned $600 then clearly I'll be disappointed in missing out on the incremental $400, but it will still be a good outcome for me (I made up the numbers though followers of TSLA know they're not unachievable).

It -has- been the case that in my pursuit of income I have also achieved outsized unrealized gains due to share price increases and the increased delta from call ownership, but the opportunity cost risk is still there. Those outsized unrealized gains have been a happy by-product of my quest for income, not a particular goal. I also could have achieved outsized unrealized losses on those calls while generating income from the covered calls.


You very well may be able to achieve even faster growth than simply owning TSLA. However that increased aggression brings with it increased risk and that risk is for the leverage to turn around and bite back, resulting in achieving slower growth than owning TSLA (or even realized losses).

 

[UltradoomY]

I have tried looking at this 3 times now.
Not sure if I am understanding the investment thesis correctly, or if I am remembering something I would have done a number of years ago and it is hurting my brain to remember...
Not being cheeky or mean spirited.
If this was me - and this isn't so please make sure you understand this is *not advice*
I would be looking to close out what I could for breakeven or a small profit and think about it again.
With this account size, you could be selling BPS and or LCC's and making consistent returns to turn it up a notch - if you have the time to do so.
Or make one play - instead of the ladder you have now.
Possibly go with just 200 total share of TSLA or just the June 23' leaps? You could move up to $750's and own a lot more of them. Selling LCC's about 20% out every week would pay them off in about a year.

 

[CLK350]

Thanks for your clear and direct answers - I should have clarified - so here goes

goal is to have my cake and eat it too

>> Yes, indeed ! Turns out I think it is possible in the current situation*, as long as TSLA is being manipulated /held down from its true value: to be more vaguely specific: I'm willing to lose 30% of my overall nut in these IRAs in exchange for a better than 2X return, as soon as possible of course. The reason it is not contradictory with "having my cake and eating it too" is that my overall IRAs will grow more than 3X in the next 5 years (conservatively speaking, IMHO).
Therefore yes, I'm OK to lose 30% of it but that whole cake is growing too (there's got to be a better way to explain this, maybe it'll come to me and I'll edit for clarity)

(*) could be badly mistaken, sure .. knock on wood!

may be able to achieve even faster growth than simply owning TSLA. However that increased aggression brings with it increased risk and that risk is for the leverage to turn around and bite back, resulting in achieving slower growth than owning TSLA

>> Yes, absolutely - in fact I will (time permitting, if I can dredge these out) illustrate how this happened to me here - I was quite happy with my 95% all TSLA positions around Jan 2021 in these IRAs - maybe about 250K total, then saw them crash to well under 100K after I'd foolishly bought short term calls near the peak expecting the SP to continue up (duh, dumb ..buying options when the IV was so high ... at least some of these $ ended up in your CC's ..) - come Nov 4 these IRAs were up close to 350 K at the top (and I had only sold a sliver of them then) because (thanks to TMC!) I sold some of my remaining TSLA for calls while in the doldrums of summer, which proceeded to zoom up in November after the Hertz reveal.

TL; DR : I am only 3/4 of the way back to where I would have been had I just held onto my shares, -and I wouldn't have spent so much time watching the tape etc (instead of just learning the basics of options)

With this account size, you could be selling BPS and or LCC's and making consistent returns to turn it up a notch - if you have the time to do so.
Or make one play - instead of the ladder you have now.
Possibly go with just 200 total share of TSLA or just the June 23' leaps? You could move up to $750's and own a lot more of them. Selling LCC's about 20% out every week would pay them off in about a year

>> Account size: I didn't have it all in one account, it's only after converting the bulk of my SEP IRA to my ROTH that I finally have enough in 1 account to be able to sell again (I once had just enough in the SEP IRA) - but yes now definitely more possibilities beckon.

>> The ladder I have now: it is really an artifact leftover from all the trades I made earlier, rolling some (most just bullish calls). You're right, I need to get rid of most, and start afresh now with what I have, in a reasoned, disciplined manner.

I guess it is my not understanding that there is no real way to sell them more cleverly than just hoping for a good timing.

Also my reluctance to part with them while in the red (daily and overall) which bothers me (not rational!), and this nagging feeling the SP might jump back up, FOMO/ greed in other words. Leaving these notes here for me to remember I did that mistake enough times already!

>> Going forward: after disposing of all these Jan calls, selling BPS or LCC's .. 750's hmm .. excellent idea, thanks! mulling these ideas over.

 

[CLK350]

Th Jan 6 update.

I still haven't sold all my Jan 21 calls, hoping -not based on real analysis- that an upward bump will compensate for the slow DTE death and let me sell them for a little more. Probably fooling mistake again, better to just accept the losses (ST or LT) and move on.
So I did that for the more sizeable TSLA 01/21/2022 975 C, rolled it to a TSLA 02/18/2022, selling 2 TSLA to make this roll possible.
I noticed I'd put a v high sell order @ 320 for that 975C way back when.

Re selling BPS or LCC's or more likely since less time consuming converting all to Jun 750 LEAPS and selling LCC's 20% out - I'm not sure about the timing- does it matter when I convert all ? Would it be better to convert all to shares first now or after the expected bump re 4Q earnings effect, and wait for a better price to convert shares to LEAPS ?

Okay so at least I rolled the Jan 21 975 C .. did a few test covered call sales in the meantime - today's Monday morning Jan 10 pre market, quick updating of this thread. That day I was keeping the other Jan 21 calls hoping for a jump at some time before expiry, not so likely now.
Still much to learn re becoming more even minded.

Friday 01 07 update: quick covered call test trade - bought back too soon, but OK

 

[CLK350]

Udate Monday Jan 9 pre market

Bought 1 TSLA in pre market @ 999.50 w/ available cash in ROTH, so the overall ROTH position is

And my overall IRA + ROTH options are

Now let's see if I can follow up on what reason dictate, that I sell all my Jan calls, leaving the Feb/ Mar as speculative pre 4Q ER bump that may or may not happen depending on macros.
If we hit lows, and stay down for a while, would I have the oomph to convert shares for LT options again ?

 

[CLK350]

Mon Jan 10:

Mon Jan 10 15:16 STO 1 TSLA 02/18/2022 1160C @ 48.35
Mon Jan 10 15:20 STO 1 TSLA 06/17/2022 1350C @ 81.00

Expecting another plunge in the short term pre 4Q reaction, getting the hang of trading options actively
Edit: grammar

Current objective is selling these Jan Calls at some decent price then riding the expected 4Q ER upswing for a while - key qualifier being "for a while" as I know timing the market is generally futile

 

[CLK350]

Update Tuesday 01 11 2022 4PM SP up a little 0.59% w/ a last minute blip to 1064

And how that recent STO pair fared (sold too early alas, I should at least have timed that second one better)

 

[CLK350]

Update Wednesday 9:00 AM - SP peaking still in early trading - realize the shorts might impede big gains as the SP might take off earlier than I thought. So BTC these two, not worth picking pennies in front of the steamroller, educational testing too expensive ;=)

Need roll these Jan 21 to next Feb 18 in order to pick up the expected 4QER bump if it does happen after Jan 21

Update 9:59 AM
Realizing I (or think that I did) made a mistake, correcting ASAP - sold a couple TSLA to close these shorts - let's see how this ages

Wed Jan 12 09:56 BTC 1 TSLA 06/17/2022 1350C @ 92.90
Wed Jan 12 09:58 BTC 1 TSLA 02/18/2022 1160C @ 59.75

 

[CLK350]

Post Jan 21 options expiry bloody Friday blood bath with a 10% TSLA SP plunge to 943 this ROTH IRA is down to half its size since its Jan 3 high of 211K

Personal observation is I still have a tendency to be too greedy and not fearful enough about the market makers, too optimistic about the future, tainted by realistic optimism about the company's fundamentals and not realistic enough about the actual trading risks. Hard not to think I'd been better off just selling everything back then, which of course is futile hindsight daydreaming.

Not too concerned since I'm still up 4X from my initial TSLA investments starting in 2019, BUT really pissed off I handed off unnecessarily moneys Tesla provided me - to the financial black holes.

At least good service to the TMC TSLA investors, reminder that HODL and no trading is really best unless you *really* know what you are doing.

Decision time again coming up and I haven't followed up on @UltradoomY 's excellent advice trying (badly) to time it well.

Past history would lead me to sell off the early calls as soon as possible, but the greedy FOMO bull in me tells me to hold on to them till post 4QER day, even though I'm all too aware that the Fed scheduled their FOMC on that same Jan 26 Earnings day, a few hours prior to the 4QER announcement, likely to tank the macros and eclipse any 4QER expected positive effect.

I'm keeping this thread open to keep track but also always happy to let anyone chime in on feedback or comments of any kind.

 

[CLK350]

Monday Jan 31 2022 - Possible end of manipulated dip, although it could be seen also as end of rotation of tech sector, which could also have been opportunistically rotated. The IRA Roth is still down 50% after this quick mini jump, the SEP is down 80%, a few thousands from the 18K high of Jan.

In retrospect the worst mistake is not having gotten out of the extreme high short term calls earlier, at least converting them into higher probability short calls. Probably good decision to just hold onto my positions and not trade in this turbulent past few days, not wanting to limit any upside exposure or risking losses from inexperienced not nimble enough moves or worse bad unavoidable timing.

Next step I'm thinking about is rolling the June 22 calls to a longer date, maybe September just in case a split is announced. Not sure what the best way would be to achieve that. Sell on a high day, buy back low ...avoid trade risk by waiting till the IV is down a bit, or the SP stabilizes for a week or so.

Refining whatever options strategy is best - once the markets calm down some, and remembering not to make that same mistake again, betting on the "obvious" predicted upswing of smashing 4QER. The MM's manipulated the SP down big time easy, precisely to clean up these bets. "Be the house" takes on a new meaning, bet according to what you think the MM's will be doing. Seriously weird.

I preferred not posting any of the slaughter red days, rather enraging to see. For the record, my current positions on this green day, finally - also beginning of the Chinese New Year 2022

R