todays $TSLA adjustment

 

25 jan

couple quick sentences about what i did today. too much to tweet.. .ok put your helmet on..

previously had 5 long 2022 calls: 300strike, 400strike (x2), 600strike (x2) that ive been selling short term upside calls against. the strategy is working well. my brokerage account is a clean +125% year over year and admittedly most is due to tesla.. but ill take the win where i can.

so the least good thing to happen is for stock to blow thru my short calls. although my long calls are gaining more than my short calls are losing compared to straight up selling new short calls out of the money im not making as much as i could be. 

ive rolled a couple times and had this weeks 690 short calls (x4) and a 707.50 short call (x1). what that positions me for is a decent pullback either tesla specific or a markets in turmoil week or two. ive been rolling and managing to bring in some income for couple weeks. but now with the stock so far past these strikes the rolls of up and out 10-15 strikes are not there. pricing these out would have had to roll flat or go out more than a week. flat would bring in a couple bucks but again im not looking for $1-$2 ($100-$200) per roll

so thats the trigger for me to adjust the entire position in order to be able to again sell out of the money calls. in order to do that i need to close out all 5 short calls... thats a huge cash outlay..$80000+ , in order to pay for that i sell enough of my long calls (ie take profits on long calls to offset the "losses" of the short calls) to pay for the $80000 ... i want to hold the 300strike long call for a potential conversion to stock come 2022. so selling the two 400 strike calls exceeded the 80k needed. 

etrade kept rejecting the order to close 4 690calls, 1 707 call, and 2 400 calls, a 3 leg trade.. order entered but after a couple minutes it was cancelled. email auto note said essentially need to close 2 short calls and 1 long call per order to make it work... bid ask on the "cancelled" order bounced between $20-$70 credit ($2000-$7000) .. so lets just say i exited with a credit on all this.

yes a paper loss on the short calls, but paper gains on the long calls. account balance unchanged. 

so now im back to just having the 3 long calls for 2022. the stock was taking off again, maybe the biden government vehicle to EV goal , maybe part the enthusiasm along with Gamestop trading... so with earnings on wednesday i wanted to get the short calls on the board, probably leaving some on the table. but the first strike at the time i looked that had $20+ in premium was the 960s. so sold 3 short 960s for Jan29 opex... 29delta. stock closed near 880, so i have essentially 100points of upside potential for this week.

i try to get $20 per in premium on earnings weeks, could have closed for 50% win during the day but was in and out all day and couldnt really keep up with the happs , just ride these out for the week.