Tesla Put sale ? $TSLA

 

16 sep - as i type futures are down a percent. here my current TSLA position as tweeted:

mark lexus

@Mark_Lexus

·

6h

current $TSLA positions: have 2 Jan2022 leaps and have next weeks short calls at 430 and 480.. 430 still has $3500 of extrinsic value(time value) and the 480 has $2800. looking to let that time premium decay for a week or so. the move of the underlying is secondary really

having the Jan2022 Leaps as a base i sell short calls against to make diagonal spreads. also called poor mans covered calls. also now the ideal situation is if i can also sell a short put. essentially selling a strangle. im unable to sell a naked strangle so this a workaround. the Leaps being 2022 there will be selloffs and rips but with diagonal spreads im looking to capitalize on the decay of the out of the money short calls. in the above tweeted situation, if held to next weeks opex there is nearly $6000 in decay. of course i will roll those prior to expiration to the next week but making a point. stock is up 90points since i bought the first Leap also.

so while waiting a week for the short calls to decay more, id like to add a short put. chart ive posted previously is still valid at levels to look at. with stock at 441 after hours the Oct02 320 put near 9delta is going for $6.00+  . as a minimum im going to be under the 330ish level, super best case as close to or below the 273level. premium is $2ish there so would need the occasional down 10% day, CNBC Markets in Turmoil, type day to juice those options to make it worthwhile.

i have an alert set for for <410 on the stock and an alert for the Oct02 315 put at > $8.00 just to get my head on the screen. will only do a one lot on the Put since ive got other Puts going on other stocks. also my biggest takeaway from the big selloff in march was to keep enough buying power available (small enough position sizes) to withstand a rapid selloff and potential margin requirement increase which happened to TSLA during the selloff.

I ended up taking a loss on that put sale to be able to fight another day, in hindsight the short put strike level did not end of getting breached and would have been a profitable trade at opex so adjusting my strategy to account for that.

Boeing ratio closing $BA

 

16sep - been ages since ive blogged. currently have a Jan2022 Leap and this weeks 162.50/172.50 call 1x2 ratio spread.. max profit is $10 at a perfect pin of 172.50. stock hit 170ish today. im going to enter in an order to take profits partly since the stock can reverse just as quick despite being up today on bad news. stock has been in a rough channel for couple months. so im looking to close out the ratio spread and sell a short call couple weeks out likely at the 185ish level. with stock at 170ish the sell order should fill and i was looking at the Oct02 185s going for $4.00 + if memory serves. tweeted my ratio spread entry on 8sep for a penny. will try to exit at $5.00 even and sell the short call for $4.00+

mark lexus

@Mark_Lexus

·

Sep 8

$BA closed the sep25 195 short call at 1.70, 50% ish of max profit, also entered into Sep 162.50/172.50 call ratio spread for .01 debit... profit range at opex 162.50-182.50

$TSLA Put sale trade

22feb - on the 20th when the stock was down 40points during the day, 860-870 i believe i

Sold the Mar13 650 put at $5.35

ive had two previous profitable Put sale trades on TSLA, and a couple losers via call credit spreads. so Put sales will be my MO going forward on this name(do more of what works, less of what doesn't work). levels / events im looking at is that i start my search at the 5 delta level, crazy as that sounds since im usually in the 25-30 delta range for Put sales. also looking at days where stock is down 30+ at least in order for the premium of the Puts to pop, especially at the 5 delta level.

although selling Puts seems risky, im finding them easier to manage than credit spreads. example:

lets say a couple weeks ago i sold the Feb 28 800 Put (expires Friday). today going for about $6 and i wanted to exit this position to reduce risk. for the same premium i could roll out 2 weeks to the Mar13 650 Put... so i could roll down 150 points and for no cost. or even to the Mar13 700 Put for a $3 credit

so selling a Put is easy to manage via rolling if tested or taking some heat. my short Put takes up about $8000 of buying power/margin.

my exit targets are about 50% of max profit if it profits slowly, if i get a 30-40% of max profit win in 1-2 days i take profits since ive made the meat of the profit and can reenter on next down move.

im not looking to hit home runs and catch $50 point move to be the hero of my twitter stream, instead im looking for consistent high probability winners. many $100-$250 winners vs the $50 moves. like the Tastytrade crew says. trade small, trade often

interesting how high the stock has moved even after the secondary stock offering in the mid 700s, wonder what the lock up is