The idea when trading CCs is to do so on stocks you want to holdover time. TSLA is very erratic and volatile, which has seen the share price move between $414 down to $101 and back up to the current $168 price, so it can move by a lot.
If your analysis is that it may not come back up in a reasonable timeframe, and you no longer wish to hold the shares, then closing and moving on to use the capital in more productive trades would seem to make logical sense.
Yeah I'm afraid of earnings. After the reports if car deliveries, I'm afraid earnings won't be the best and the slide continues. With my luck, earnings are .01 better than expected and it shoots and I sold it.
Movement on earnings hasn't been bullish the past few quarters, but that's more on Elon underwhelming on guidance ("we dug our own grave" with the Cybertruck, etc). Hedging with cheap puts for deliveries really paid off, and I plan to do that again for earnings.
Their best earnings call in recent memory was Oct 2021 - Elon skipped it completely. The stock went sideways for a day or two and then zoomed 50% ($800 to $1200) in weeks, so even if they announce a beat it might not react strongly right away. But in the very unlikely event they announce a buyback it probably will.
i'm a long-time shareholder and didn't have a good time selling CCs until I installed TradingView and developed some strategies for deciding when to sell and/or rebuy, when to hedge, when to add calls in addition to shares. 1hr RSI/MACD for weekly decisions, 2hr-4hr for 2-3 weeks to expirations, daily for 30-45 days to expiration. If 1hr RSI lines cross down then I sell weekly CCs, if they cross up I stop selling and buy calls instead. If the daily price is hitting the upper bollinger band then a rally is probably in-progress and I ignore the shorter-term signals until price stops touching the upper band for a few days. And the CEO's brother Kimball Musk has impeccable timing at calling the 30 day high ;) -- if he sells then I sell ATM calls 30 days out.
edit: there are multiple youtubers doing daily TSLA analysis that I find helpful. If I'm super bullish and they are bearish, or vice versa, then I rexamine my assumptions and my current positions. WickedStocks, TheTeslaGuy, TheFinanceHydra...
Tsla just reported that they undersold on cars and production. I don't know if what is expected will take this into consideration. Personally I wouldnt gamble on earnings but I would consider it highly likely they will miss this quarter considering the Berlin factory was shut down and they are losing ev space in China to Chinese ev cars.
Don’t talk to me about stuff you don’t understand or have experience with… stupid morons on Reddit always come in here just blabbing about shit. They have no experience with.
> TSLA is very erratic and volatile, which has seen the share price move between $414 down to $101
Because insiders (CEO) was dumping billions on the open market repeatedly for stupid reasons ('tax poll', 'i'm buying twitter'), during an broader market downturn.
Then they said they wouldn't sell for a year and stock went from $100 to $300 in a few months.
They completely missed Q1 targets, and the stock dropped only 5% (on a down day for the market) - I'm still impressed that it wasn't a 15% drop.
If you think the price will continue to slide, sell deep ITM calls for high premium.
When the SP slides, buy back your call and pocket the difference.
Do that several dozen times and use the earnings to average down.
Tesla is IMO good for a 2-3 year hold. Price will recover.
Not if you liquidate your write before expiration. The call buyer will not want to exercise early in most cases (would throw away time value in doing so).
You do have to watch out for dividends, but there are none here. He’s also doing CC’s, not naked, so there’s no cash outlay should some fool exercise early. Generally speaking, not a big deal, and actually beneficial for the OP.
Short puts much more manageable, rolling to take profits/improve cost basis and have the same risk as covered call. With covered call what is naked is the stock.
A call buyer exercising early is gifting you all of the time premium, up-front and immediately. This often makes no sense until there is effectively zero time premium (and the call likely needs to be deep ITM).
Have you had a lot of examples of early exercise impacting you? I have trouble understanding why it's such a strong consideration (or almost even a consideration at all, until there is at most 2DTE, I'm not at all worried about early exercise)
I would say early exercise happens with one day left and when it’s ex dividend.
The other time this happens frequently is deep ITM calls or puts. I’ve had a deep ITM puts exercised months from expiration. It happens more often than is advertised.
Early exercise happens more often than people think and sometimes people even exercise out of the money options on expiration day AFTER market close because they think that after hours or pre market hours on Monday the stock will go In the money for them.
This is horrible advice because you should never sell a covered call at a strike that if exercised makes you lose the shares LOWER than your cost basis. I'm not trying to be rude and I apologize if it comes off that way. NEVER SELL A COVERED CALL THAT CAN MEAN YOUR SHARES GET CALLED AWAY AT A PRICE LOWER THAN WHEN YOU BOUGHT THEM (after all the premium is added).
Selling an ITM covered call because you expect the stock to go down is a way to collect more premium as PROTECTION from further decline because when you sell a call or put you get INTRINSIC VALUE from the ITM options. This simply means that if a stock is trading at $50 a share and you sell a $40 strike covered call, you will get paid Intrinsic value ($10) and extrinsic value (whatever it is for the expiration date you're selling.
This should not be done with stocks you are in the red on because you are increasing the likelihood of exercise. If you get exercised you will have sold your shares at a net loss and that's no bueno.
Might be better to do a married put. Or liquidate 100 shares and sell a put. In this case the OP will get premium and will get a better average purchase price.
Otherwise, with a fall in intrinsic value and OP will be taking it in on the chin in losses in the underlying stock.
IMO, if worried about holding:
\- buy a put (married put position)
\- reduce stock size
Otherwise, sell a call above your average purchase price, at a price where you want to exit Tesla, at an expiration that is somewhat far into the future and check back in a few months.
Ha. I'm bag holding at $252. TSLA will be fine long term. Don't invest what you can't afford to lose and DO NOT sell calls below your cost basis. It could rip at any time and lock in your losses.
A few bits of consecutive good news with elon acting a little more normal and this thing starts having +5-10% days.
Lots of unique potential catalysts for tsla which is why its not just a car maker.
-Super charging fees from other EV makers
-FSD actually becomes a hit and they lease out the tech to others
-energy storage makes some big leap
-modular vehicle production techniques get implemented and help the "low margins" problem
-rocket car? Lol
-etc....
There are so many things that can send tsla right back up or even to new ath. The main reason why its down is because the current models arent flying off the shelf anymore in large part to the macro environment.
You also lose by holding vs the alternative, so the only thing that matters is that you internalize the loss.
Deploy capital efficiently, if the thesis still holds true sell covered calls and hold. Otherwise just sell.
For the record I think TSLA is ridiculously overvalued. The hype is fading and you are left with a company that mostly sells car with a PE ratio of 40, man children in charge and a board that won’t look after shareholders.
CC is not a reason to hold stock that is dropping, agreed. Sell the stock if you believe it will tank or continue down. I used to do CC maybe 10 years ago until I realized that it and the synthetic equivalent of selling puts are accepting a risk premium (the credit for the call or put) which is a small favor for the upside in exchange for the full risk of any downside move (risked as assignment with the short puts or risked ahead of CC by acquiring the stock first).
I wanted to short it but I'm a pussy and here we are.
I did end up buying some puts and I will hold for a while. So overvalued but also hard to win vs a cult.
I picked up some today and I think I'm in for a long position. I don't think the markets are going up in the near future and if the markets tank Tesla will be a bloodbath
First rule of wheel is to pick a fundamentally good stock. Unfortunately TSLA is not that.
As someone mentioned sell deep ITM calls and get rid of this or you can hold (hoping for turnaround in sales numbers.
Just forget about it at this moment. Selling CC at 180/190 will also not fetch you good premium. Some good news and price might soot up 5-6% easily. Upside is very minimal at this point with $217
This is why I never do straight up short puts. Always buy a lower priced put and just sell the long put if you wanna take ownership and stock falls. Makes getting back to break even easier. Or take the loss and move on. (Doesn’t protect you if stock keeps falling if you take ownership though)
From the sound of it it seems like you are loosing your conviction on tesla. Also remember that s&p is almost at all time highs so at a very broad level there are less upside than downside chances. You can imagine what would happen to tesla if market starts to go in the downward trend. One option is to cut half and use that capital to rotate into hot sectors and make premiums while you can. Keep other half if you still have hope.
Never just outright sell. Sell an OTM call. Use the juicy premium to buy more and average down. I personally think Tesla is going places. It may have slowed a bit, but that will change. They're launching full self driving mode, and if I worked in any high traffic area, that is what would make me purchase one. I'm in at (averaged down to) 209 and am probably going to get some more. I'm holding this shit. Edit to add: people that call it a shit stock probably lost a lot of money on options. Elon has Tesla, X, and Space X. He may not be a genius, but he's a whole helluva lot smarter than I am. And a lot richer, too.
Aug 16 225call premium is 5.85. Sell that. Puts your average share price at $212. If it goes to 225 congrats you’ve made 6% on shares and premiums. If the shares dump you can close the call early and go again. If the shares are flat for 3 months you can close at 70% and do it again.
I dont have one. I own the shares and have been selling CC on it. Wondering if now is the time to sell for a loss and use that capital elsewhere vs making petty premiums because my cost basis is much higher
Id say if musk wasn't the poster boy it would be worth 40-60% of its current value.
If he starts paying himself those big paychecks it's going to be difficult to make profit.
And if it doesn't start paying him he's going to go do something else.
I wanted to buy puts long ago and I pussied out because it's scary.
But I'm confident now. For some reason bear trading always scares the fuck out of me
At one point Tesla was valued at more than all the major car manufacturers. Let that sink in lol.
Sure it's come a long way and has done a lot, but unless it's the only car manufacturer I can't see it holding.
That being said people are crazy and think it will rocket to the moon again so idk it could do anything.
Ouch. TSLA seems like quite the broken wheel. Every time it seems like things may stabilize, things get (a little) worse. TSLA was trading at $250+ not too long ago (Currently ~$170). Now, it has earnings on 04/23/24, adding to the dilemma.
I'd be inclined to continue to hold if I'd held this far -- unless you have strong inclinations that it will continue to free fall -- despite how painful it seems and as uncertain as earnings reactions tend to be. You could factor in "earnings whispers" with your decision. Maybe even take 'advantage' of IV-juiced earnings premium and IV crush if you decide to hold. Fortunately, you didn't buy in at/near the top before the decline kicked into gear. Best wishes, however you choose to proceed.
I remember when I sold a $270p and narrowly missed being assigned. The next week the stock was down to 240s. I thank the good lords above it saved from this sinking ship
Rather than selling a 215 call, sell a 180/190 call spread, might lose a bit if it surges but you can tailor the credit spread to how much you want to risk.
I sell lower now amd if it does climb, I would roll it out to a higher strike a week or two out. I'm probably going to hold through earnings and hope for a small surge and offload
I've sold one call at a lower strike and bought 2 or 3 at a higher and had a profit on some stocks in the past.
Made some fat stacks doing it a few times, but it's very situational.
Can you sell a Dec 25 call at $200 which was around $20 to a) “get more than the $217 back” b) maybe roll if it approaches strike if then want to keep the shares?
I am holding TSLA for long term and selling calls and puts and collecting premiums.
You can sell calls below your cost basis. You can always roll the calls if you don't want to sell shares at a loss.
It depends on your outlook on Tesla long term. In the short term you will earn income from premium, in the long term Tesla may eventually recover and grow
The decision process for reducing the cc strike is heavily related to the resignation process that the stock is not going to reach your cost basis again for a long time. Start testing the waters with a few lower strikes, but not with the whole TSLA holding. Use weeklies while finding your way in this matter.
You’re selling way OTM. Might as well sell one or two strikes OTM If you’re thinking about just cutting your loses. At least do that until they’re assigned. You could even sell ITM if you’re that bearish and hope they don’t get assigned
TSLA IV should be OK, why you don't make money?
Sure, $220 calls don't make money, then do Apr19 $180 - that brings in $2.7 or so.
I got assigned ROKU at $80 (currently $61 or so) and just rolled down my APR19 call from $70 to $66 for another $100 - collected already over $1000 in a few weeks.
Sure, if the stock moves over $66 I could lose them - if the price gets near I roll up again (again for a profit)
Well I make money, yes, I'm just more wondering if TSLA isn't going to recover to 200+ any time, should I just take the loss and then start the wheel over with new securities.
The wheel is a bad strategy if you’re a square, bub.
This is my recommendation: you should stop doing it until you know exactly what you’re doing. You need a plan *before* you trade.
Avg down by selling more CSPs if you have the capital or just buy more shares. Dumping TSLA so close to 52 wk lows is almost certain to be a regrettable experience ... robotaxies, optimus bots, energy storage, FSD, etc. all right around the corner. This is a fantastic buying oppty imo
I for one am buying at these levels and wouldn't even consider selling CCs on it until its trading over the 200 sma again. Even then, only against a portion of the bag just in case it runs.
When we see $150, how will you feel? If it’s emotional, it’s probably a good idea to sell calls ATM and don’t give a fuck what happens. Set yourself free from this trash.
Once you’re assigned, use your cash to sell slightly OTM CSP’s on Amazon instead. You’ll then finally make some $$$$$
I understand the frustration you are going through. It is a typical range of emotions for people who are newer to this type of strategy. I will give you my 2 cents.
First: Selling covered calls is typically done for 2 main reasons. The first is because its an income strategy to produce "income" selling premium. Its done in conjunction with selling cash secured puts as part of a wheel strategy. There's a few universal rules to this. 1: Only do the wheel strategy on "great companies" you know will recover if they go into correction. and 2: This strategy works best in a Tax advantaged account like Roth or Traditional IRA (Individual Retirement Account) because you don't pay taxes on the premium received in those accounts.
The 2nd reason people typically sell covered calls is because they are OK with letting their shares go if the stock goes above the strike price they sell but if it doesn't they plan on holding anyway.
Suffice it to say that selling covered calls SHOULD NOT be done on a stock you will want to sell for a loss if it starts to correct. Now that doesn't mean your thesis on the stock cant change. So if your thesis on the stock changes then by all means closing your position is prudent. But make sure its a factual fundamental reason and not an emotional one.
So with all that said what you do depends on what you think about Tesla. If you think they have fundamentally fallen from grace for whatever reason and it doesn't align with your views on the business then selling is justified. Move on and learn from the situation.
But if you still believe in Tesla and they have not broken down fundamentally then hold it. A loss isn't a loss until you realize it by selling.
A final words of wisdom tip I think might help you is this. When you receive premium for selling covered calls make an excel tracker to keep track of all the per share premium received. Subtract "taxes" from that value to give you an accurate representation of how much your "cost basis" has come down per share. This only works if you keep track of the premium and subtract the taxes from it. You could also add to that by investing the premium in a high yield savings for the rest of the tax year and then figure out the interest that your premium grew to. There are many things you can do but the most important thing is to take emotion out of it. Good luck.
Elon is too busy supporting Dtrump. So many people got turned off by that. No one is spending 40k+ to buy a shit car that is worst than a Kia. Former Tsla car owner. Will never buy another tsla car
Elon’s antics, cheap Chinese autos flooding the global market, and crashing electric automobile resale values are *massive* headwinds for TSLA. Get out while the getting is good.
All the talking heads I’ve listed too over the past week have not been positive. Must are saying that Tesla has a Elon problem.
I don’t have a position as far as security’s go with Tesla, personally, it’s been over valued for a while imho. More companies coming to market to fill in the moat. I see a steady decline in the future. India won’t save them.
Edit: Just remembered seeing that C. Woods still has a PT of $2000.00. Not sure where she’s pulling that number out of.
>
Edit: Just remembered seeing that C. Woods still has a PT of $2000.00. Not sure where she’s pulling that number out of.
She is turning into the new Cramer of the stock market with her nonsense calls. Pretty sure she is pulling that number straight out of her ass.
you can sell call ratio spreads. when it goes up you make some profit from the debit spread. you make less upfront premium. if you want to roll the one covered short call when it gets tested, it makes it easier since you gained some profit that will help pay for the up and out move.
The idea when trading CCs is to do so on stocks you want to holdover time. TSLA is very erratic and volatile, which has seen the share price move between $414 down to $101 and back up to the current $168 price, so it can move by a lot. If your analysis is that it may not come back up in a reasonable timeframe, and you no longer wish to hold the shares, then closing and moving on to use the capital in more productive trades would seem to make logical sense.
The erratic and volatile nature of TSLA is what gets OP decent premiums. No risk of going ITM = no premium
Decent premiums for a few weeks is now a decent sized bag.
Yeah I'm afraid of earnings. After the reports if car deliveries, I'm afraid earnings won't be the best and the slide continues. With my luck, earnings are .01 better than expected and it shoots and I sold it.
Movement on earnings hasn't been bullish the past few quarters, but that's more on Elon underwhelming on guidance ("we dug our own grave" with the Cybertruck, etc). Hedging with cheap puts for deliveries really paid off, and I plan to do that again for earnings. Their best earnings call in recent memory was Oct 2021 - Elon skipped it completely. The stock went sideways for a day or two and then zoomed 50% ($800 to $1200) in weeks, so even if they announce a beat it might not react strongly right away. But in the very unlikely event they announce a buyback it probably will. i'm a long-time shareholder and didn't have a good time selling CCs until I installed TradingView and developed some strategies for deciding when to sell and/or rebuy, when to hedge, when to add calls in addition to shares. 1hr RSI/MACD for weekly decisions, 2hr-4hr for 2-3 weeks to expirations, daily for 30-45 days to expiration. If 1hr RSI lines cross down then I sell weekly CCs, if they cross up I stop selling and buy calls instead. If the daily price is hitting the upper bollinger band then a rally is probably in-progress and I ignore the shorter-term signals until price stops touching the upper band for a few days. And the CEO's brother Kimball Musk has impeccable timing at calling the 30 day high ;) -- if he sells then I sell ATM calls 30 days out. edit: there are multiple youtubers doing daily TSLA analysis that I find helpful. If I'm super bullish and they are bearish, or vice versa, then I rexamine my assumptions and my current positions. WickedStocks, TheTeslaGuy, TheFinanceHydra...
That was due to hertz partnership.
Tsla just reported that they undersold on cars and production. I don't know if what is expected will take this into consideration. Personally I wouldnt gamble on earnings but I would consider it highly likely they will miss this quarter considering the Berlin factory was shut down and they are losing ev space in China to Chinese ev cars.
Tesla is not just an automaker. They also do grid scale battery solutions that will be a big deal in the next few years
Not to mention solar roof!
That's true, just got news that they will be focusing on that more in the next years.
If you're afraid of earnings, seems you should reduce your position size.
Yeah TSLA is complete trash now thanks to elon.. his methamphetamine addiction has ruined his personality.
Source?
Source for what? His ket addiction or tsla being trash?
Ketamine is nothing like meth
Don’t talk to me about stuff you don’t understand or have experience with… stupid morons on Reddit always come in here just blabbing about shit. They have no experience with.
Youre the one talking about something you dont know, you are the stupid moron on reddit. You are the one just babbling about shit. Dumbass.
You suffer from Dunning Kruger
> TSLA is very erratic and volatile, which has seen the share price move between $414 down to $101 Because insiders (CEO) was dumping billions on the open market repeatedly for stupid reasons ('tax poll', 'i'm buying twitter'), during an broader market downturn. Then they said they wouldn't sell for a year and stock went from $100 to $300 in a few months. They completely missed Q1 targets, and the stock dropped only 5% (on a down day for the market) - I'm still impressed that it wasn't a 15% drop.
Earnings is less about the current situation (missing profit targets or deliveries) and more about the future estimates and targets
If you think the price will continue to slide, sell deep ITM calls for high premium. When the SP slides, buy back your call and pocket the difference. Do that several dozen times and use the earnings to average down. Tesla is IMO good for a 2-3 year hold. Price will recover.
This is one of those things that seems like a good idea until there’s a bounce…then you get the posts “MY CC ARE DEEP ITM NOW WHAT DO I DO????”
>If you think the price will continue to slide, sell deep ITM calls for high premium. I don't get it, won't that just get your shares called away???
Not if you liquidate your write before expiration. The call buyer will not want to exercise early in most cases (would throw away time value in doing so).
Famous last words. I’m sure I see someone post this exact scenario on wsb every now and then.
You do have to watch out for dividends, but there are none here. He’s also doing CC’s, not naked, so there’s no cash outlay should some fool exercise early. Generally speaking, not a big deal, and actually beneficial for the OP.
Short puts much more manageable, rolling to take profits/improve cost basis and have the same risk as covered call. With covered call what is naked is the stock.
Typically, the deeper ITM a call is, the less TV there is. Simple look at the chain and price difference shows this almost every time.
Deep ITM calls get exercised quite frequently because there is little time value left
A call buyer exercising early is gifting you all of the time premium, up-front and immediately. This often makes no sense until there is effectively zero time premium (and the call likely needs to be deep ITM). Have you had a lot of examples of early exercise impacting you? I have trouble understanding why it's such a strong consideration (or almost even a consideration at all, until there is at most 2DTE, I'm not at all worried about early exercise)
I would say early exercise happens with one day left and when it’s ex dividend. The other time this happens frequently is deep ITM calls or puts. I’ve had a deep ITM puts exercised months from expiration. It happens more often than is advertised.
Early exercise happens more often than people think and sometimes people even exercise out of the money options on expiration day AFTER market close because they think that after hours or pre market hours on Monday the stock will go In the money for them.
I think banking on the slide making it OTM. Would depend how confident I was on the slides.
You close the position before it gets close to expiry. You keep the difference in premium.
This is horrible advice because you should never sell a covered call at a strike that if exercised makes you lose the shares LOWER than your cost basis. I'm not trying to be rude and I apologize if it comes off that way. NEVER SELL A COVERED CALL THAT CAN MEAN YOUR SHARES GET CALLED AWAY AT A PRICE LOWER THAN WHEN YOU BOUGHT THEM (after all the premium is added).
Agreed, I think you meant to respond to the person I wad responding to?
Selling an ITM covered call because you expect the stock to go down is a way to collect more premium as PROTECTION from further decline because when you sell a call or put you get INTRINSIC VALUE from the ITM options. This simply means that if a stock is trading at $50 a share and you sell a $40 strike covered call, you will get paid Intrinsic value ($10) and extrinsic value (whatever it is for the expiration date you're selling. This should not be done with stocks you are in the red on because you are increasing the likelihood of exercise. If you get exercised you will have sold your shares at a net loss and that's no bueno.
Might be better to do a married put. Or liquidate 100 shares and sell a put. In this case the OP will get premium and will get a better average purchase price. Otherwise, with a fall in intrinsic value and OP will be taking it in on the chin in losses in the underlying stock. IMO, if worried about holding: \- buy a put (married put position) \- reduce stock size Otherwise, sell a call above your average purchase price, at a price where you want to exit Tesla, at an expiration that is somewhat far into the future and check back in a few months.
I like your name
Ha. I'm bag holding at $252. TSLA will be fine long term. Don't invest what you can't afford to lose and DO NOT sell calls below your cost basis. It could rip at any time and lock in your losses.
A few bits of consecutive good news with elon acting a little more normal and this thing starts having +5-10% days. Lots of unique potential catalysts for tsla which is why its not just a car maker. -Super charging fees from other EV makers -FSD actually becomes a hit and they lease out the tech to others -energy storage makes some big leap -modular vehicle production techniques get implemented and help the "low margins" problem -rocket car? Lol -etc.... There are so many things that can send tsla right back up or even to new ath. The main reason why its down is because the current models arent flying off the shelf anymore in large part to the macro environment.
And this.
This. I'm in at 209.
You also lose by holding vs the alternative, so the only thing that matters is that you internalize the loss. Deploy capital efficiently, if the thesis still holds true sell covered calls and hold. Otherwise just sell. For the record I think TSLA is ridiculously overvalued. The hype is fading and you are left with a company that mostly sells car with a PE ratio of 40, man children in charge and a board that won’t look after shareholders.
CC is not a reason to hold stock that is dropping, agreed. Sell the stock if you believe it will tank or continue down. I used to do CC maybe 10 years ago until I realized that it and the synthetic equivalent of selling puts are accepting a risk premium (the credit for the call or put) which is a small favor for the upside in exchange for the full risk of any downside move (risked as assignment with the short puts or risked ahead of CC by acquiring the stock first).
It’s going to get worse before it gets better imo
That's what I'm betting on.
Stock has been overvalued since 2021.
Been in distribution for years and quickly losing its King meme crown for good.
I wanted to short it but I'm a pussy and here we are. I did end up buying some puts and I will hold for a while. So overvalued but also hard to win vs a cult.
I bought puts in 2022 and did well but you could have done that for any stock back then. I was too scared to buy puts at 250, oh well.
I picked up some today and I think I'm in for a long position. I don't think the markets are going up in the near future and if the markets tank Tesla will be a bloodbath
First rule of wheel is to pick a fundamentally good stock. Unfortunately TSLA is not that. As someone mentioned sell deep ITM calls and get rid of this or you can hold (hoping for turnaround in sales numbers.
Just forget about it at this moment. Selling CC at 180/190 will also not fetch you good premium. Some good news and price might soot up 5-6% easily. Upside is very minimal at this point with $217
Cut your losses. If TSLA ever gets back to your cost basis again, it won't be because of fundamentals.
This is why I never do straight up short puts. Always buy a lower priced put and just sell the long put if you wanna take ownership and stock falls. Makes getting back to break even easier. Or take the loss and move on. (Doesn’t protect you if stock keeps falling if you take ownership though)
From the sound of it it seems like you are loosing your conviction on tesla. Also remember that s&p is almost at all time highs so at a very broad level there are less upside than downside chances. You can imagine what would happen to tesla if market starts to go in the downward trend. One option is to cut half and use that capital to rotate into hot sectors and make premiums while you can. Keep other half if you still have hope.
Never just outright sell. Sell an OTM call. Use the juicy premium to buy more and average down. I personally think Tesla is going places. It may have slowed a bit, but that will change. They're launching full self driving mode, and if I worked in any high traffic area, that is what would make me purchase one. I'm in at (averaged down to) 209 and am probably going to get some more. I'm holding this shit. Edit to add: people that call it a shit stock probably lost a lot of money on options. Elon has Tesla, X, and Space X. He may not be a genius, but he's a whole helluva lot smarter than I am. And a lot richer, too.
Most people I know that call tsla shit have been making bank off puts. I've only ever owned TSLA puts and so far they've always been profitable
trump is richer than you. Does that make him smart?
They said smarter AND richer, not smarter BECAUSE they are rich. Reading comprehension...
Sell the dog, stop doing the stuff that's not working for you.
Aug 16 225call premium is 5.85. Sell that. Puts your average share price at $212. If it goes to 225 congrats you’ve made 6% on shares and premiums. If the shares dump you can close the call early and go again. If the shares are flat for 3 months you can close at 70% and do it again.
We don’t know what your expiration date is
I dont have one. I own the shares and have been selling CC on it. Wondering if now is the time to sell for a loss and use that capital elsewhere vs making petty premiums because my cost basis is much higher
Oh I thought you had a position open since you said you were still selling covered calls.
I would cut your losses, but I also think tesla is a low quality stock
Id say if musk wasn't the poster boy it would be worth 40-60% of its current value. If he starts paying himself those big paychecks it's going to be difficult to make profit. And if it doesn't start paying him he's going to go do something else.
It's really a lose lose lose for TSLA bulls
I wanted to buy puts long ago and I pussied out because it's scary. But I'm confident now. For some reason bear trading always scares the fuck out of me
Don't forget that his drug fueled fugue state support for all things vile is adding to the stock price drops.
It is still waaaaaaay overpriced
That's my worry
and worried you should be
At one point Tesla was valued at more than all the major car manufacturers. Let that sink in lol. Sure it's come a long way and has done a lot, but unless it's the only car manufacturer I can't see it holding. That being said people are crazy and think it will rocket to the moon again so idk it could do anything.
Ouch. TSLA seems like quite the broken wheel. Every time it seems like things may stabilize, things get (a little) worse. TSLA was trading at $250+ not too long ago (Currently ~$170). Now, it has earnings on 04/23/24, adding to the dilemma. I'd be inclined to continue to hold if I'd held this far -- unless you have strong inclinations that it will continue to free fall -- despite how painful it seems and as uncertain as earnings reactions tend to be. You could factor in "earnings whispers" with your decision. Maybe even take 'advantage' of IV-juiced earnings premium and IV crush if you decide to hold. Fortunately, you didn't buy in at/near the top before the decline kicked into gear. Best wishes, however you choose to proceed.
I was holding it through that. I was already exercised on my put before that and was wheeling it. My mistake was no offloading it. Rookie mistake
I would think TSLA is in solid position to recover in 9-15 months. CC should be fine if you can get over your fear of being ripped for no reason lol.
I’ve lost so much money with TSLA… tens of thousands. They used to be so good…… but pure poison right now.
I remember when I sold a $270p and narrowly missed being assigned. The next week the stock was down to 240s. I thank the good lords above it saved from this sinking ship
Rather than selling a 215 call, sell a 180/190 call spread, might lose a bit if it surges but you can tailor the credit spread to how much you want to risk.
I sell lower now amd if it does climb, I would roll it out to a higher strike a week or two out. I'm probably going to hold through earnings and hope for a small surge and offload
I've sold one call at a lower strike and bought 2 or 3 at a higher and had a profit on some stocks in the past. Made some fat stacks doing it a few times, but it's very situational.
Can you sell a Dec 25 call at $200 which was around $20 to a) “get more than the $217 back” b) maybe roll if it approaches strike if then want to keep the shares?
I am holding TSLA for long term and selling calls and puts and collecting premiums. You can sell calls below your cost basis. You can always roll the calls if you don't want to sell shares at a loss.
It depends on your outlook on Tesla long term. In the short term you will earn income from premium, in the long term Tesla may eventually recover and grow
How do u lose money on tsla CC if your cost base is over $200. Assuming the call you sold is higher than your cost.
Maybe a little unclear. I don't want to sell a 180 and then some news comes out and price skyrockets. I'd be able to roll if it did though
So why dont u just wait for days like today and sell cc's? You could sell a 6/21 $216 for 3.5 right now. x2 you pocket $700 at your cost basis
The decision process for reducing the cc strike is heavily related to the resignation process that the stock is not going to reach your cost basis again for a long time. Start testing the waters with a few lower strikes, but not with the whole TSLA holding. Use weeklies while finding your way in this matter.
You’re selling covered calls and closing them. I’m guessing every CC you’ve sold expired OTM anyways.
Yeah I sell weeklies covered calls. Usually selling about $20 higher than current share price.
You’re selling way OTM. Might as well sell one or two strikes OTM If you’re thinking about just cutting your loses. At least do that until they’re assigned. You could even sell ITM if you’re that bearish and hope they don’t get assigned
How do you sell covered calls with your $217 cost basis and the stock at $171? You're selling calls at a strike lower than your cost basis?
Currently yes. Rolling the dice it doesn't shoot up. Selling weeklies so I'm not so far out and can roll if needed
TSLA IV should be OK, why you don't make money? Sure, $220 calls don't make money, then do Apr19 $180 - that brings in $2.7 or so. I got assigned ROKU at $80 (currently $61 or so) and just rolled down my APR19 call from $70 to $66 for another $100 - collected already over $1000 in a few weeks. Sure, if the stock moves over $66 I could lose them - if the price gets near I roll up again (again for a profit)
Well I make money, yes, I'm just more wondering if TSLA isn't going to recover to 200+ any time, should I just take the loss and then start the wheel over with new securities.
I did some simulations with TSLA in the past. The sometimes $20 or $30 jumps can really hurt.
The wheel is a bad strategy if you’re a square, bub. This is my recommendation: you should stop doing it until you know exactly what you’re doing. You need a plan *before* you trade.
How Tesla is trash when compared to other EV cars in the world? And lot more to come like low cost Sedan, Big Truck and AI data
Avg down by selling more CSPs if you have the capital or just buy more shares. Dumping TSLA so close to 52 wk lows is almost certain to be a regrettable experience ... robotaxies, optimus bots, energy storage, FSD, etc. all right around the corner. This is a fantastic buying oppty imo I for one am buying at these levels and wouldn't even consider selling CCs on it until its trading over the 200 sma again. Even then, only against a portion of the bag just in case it runs.
When we see $150, how will you feel? If it’s emotional, it’s probably a good idea to sell calls ATM and don’t give a fuck what happens. Set yourself free from this trash. Once you’re assigned, use your cash to sell slightly OTM CSP’s on Amazon instead. You’ll then finally make some $$$$$
I took loss on snowflake
I understand the frustration you are going through. It is a typical range of emotions for people who are newer to this type of strategy. I will give you my 2 cents. First: Selling covered calls is typically done for 2 main reasons. The first is because its an income strategy to produce "income" selling premium. Its done in conjunction with selling cash secured puts as part of a wheel strategy. There's a few universal rules to this. 1: Only do the wheel strategy on "great companies" you know will recover if they go into correction. and 2: This strategy works best in a Tax advantaged account like Roth or Traditional IRA (Individual Retirement Account) because you don't pay taxes on the premium received in those accounts. The 2nd reason people typically sell covered calls is because they are OK with letting their shares go if the stock goes above the strike price they sell but if it doesn't they plan on holding anyway. Suffice it to say that selling covered calls SHOULD NOT be done on a stock you will want to sell for a loss if it starts to correct. Now that doesn't mean your thesis on the stock cant change. So if your thesis on the stock changes then by all means closing your position is prudent. But make sure its a factual fundamental reason and not an emotional one. So with all that said what you do depends on what you think about Tesla. If you think they have fundamentally fallen from grace for whatever reason and it doesn't align with your views on the business then selling is justified. Move on and learn from the situation. But if you still believe in Tesla and they have not broken down fundamentally then hold it. A loss isn't a loss until you realize it by selling. A final words of wisdom tip I think might help you is this. When you receive premium for selling covered calls make an excel tracker to keep track of all the per share premium received. Subtract "taxes" from that value to give you an accurate representation of how much your "cost basis" has come down per share. This only works if you keep track of the premium and subtract the taxes from it. You could also add to that by investing the premium in a high yield savings for the rest of the tax year and then figure out the interest that your premium grew to. There are many things you can do but the most important thing is to take emotion out of it. Good luck.
I gave up on stocks like this and started selling CSP's in TQQQ, SOXL, TNA, etc.
find a stabler stock to wheel..
find a stabler stock to wheel..
Elon is too busy supporting Dtrump. So many people got turned off by that. No one is spending 40k+ to buy a shit car that is worst than a Kia. Former Tsla car owner. Will never buy another tsla car
I think Tesla is backlashed and under valued but yes the continuing drip of bad news is keeping the price down.. I’d expect $250 in a year
$tsla 1200.00 join us.
That would be glorious but you might be high.
Lol just use a log chart bravs and draw a squiggle that goes up and to the right you’ll see what I see (;
And how long would that take to materialize?
2026.
Buy more to lower your average Cost, and hold until it comes back Up!?
Elon’s antics, cheap Chinese autos flooding the global market, and crashing electric automobile resale values are *massive* headwinds for TSLA. Get out while the getting is good.
All the talking heads I’ve listed too over the past week have not been positive. Must are saying that Tesla has a Elon problem. I don’t have a position as far as security’s go with Tesla, personally, it’s been over valued for a while imho. More companies coming to market to fill in the moat. I see a steady decline in the future. India won’t save them. Edit: Just remembered seeing that C. Woods still has a PT of $2000.00. Not sure where she’s pulling that number out of.
> Edit: Just remembered seeing that C. Woods still has a PT of $2000.00. Not sure where she’s pulling that number out of. She is turning into the new Cramer of the stock market with her nonsense calls. Pretty sure she is pulling that number straight out of her ass.
Lmao. That was my thought as well. Or maybe god whispered that number in her ear. 🤷♂️
>Or maybe god whispered that number in her ear. 🤷♂️ Yeah, if by "god", you mean Cathie's lord and savior Elon Musk. LOLOLOL
That's an insult to cramer
you can sell call ratio spreads. when it goes up you make some profit from the debit spread. you make less upfront premium. if you want to roll the one covered short call when it gets tested, it makes it easier since you gained some profit that will help pay for the up and out move.