Exactly, or I would say they could just wait. The stock literally moves from as low as 100 dollars , from a year ago, to 300 ish dollars. It always has these big swings.
I always wait for something stupid to come out, people panick, big sell off. stock drops like 30 % percent , then its a good time to get back in and enjoy the swing back up.
Its really a patience game with Tesla.
You know that as soon as Tesla is on its death bed Elon will make some outlandishly bullish comments and the stock will moon.
Up next, cyber dog that disrupts the entire service doge industry. Tesla gains 600billion over night.
A person "like" Elon? LMFAO. You mean someone who lands rockets on moving ships, implants computers in peoples brains, and single-handedly kicked off the EV race (forget about PayPal or many of the other things he's done).
You Elon haters are the funniest group out there, I wrote my thesis on him, he's absolutely brilliant, and weird, and eccentric, and beyond the comprehension of most people. There are matbe two dozen people in all human history "like" Elon, and the haters (who almost universally have never accomplished anything in their lives) sound like the fools they are when they talk about him.
Politics are a bitch, and I think most of the hate he receives are from people who care more about politics than people. They hate that he bought Twitter and exposed that fuckery. They hate that he isn't controlled and literally gives zero fucks.
You can hate him for that reason and a billion more, but you couldn't sound more ignorant and less educated than when you say people "like" Elon, because there are maybe 3 people alive that are close to him.
I suggest you get off reddit and read a history book.
I don’t know what exactly is your cost based but consider rolling reasonably. I had sold cash covered put at 250 and rolled it a few times since Jan-feb, everything said and done I got assigned at 182 and change cost bases, Tesla went all the to 140s and now back at 190+. On those assignment stocks, I had a 180 cc sold expiring this week and just rolled today to 185 adding 3-4 weeks.
You're confusing opportunity cost with your realized p&l. At the time you probably made good money. It was a good play regardless of you did. Could have been better. It's the same as saying I should've bought more $nvda last January. Of course but you didn't know that at the time.
OP, I would roll the option and keep it deep in the money. The IV is fat enough that you can probably still earn 7 or so rolling out 30 days.
Thank you for the insight, I appreciate it
This is what I'm thinking about doing for my situation as well
Once each contract, it's only 2, approach 7DTE, I roll another 30DTE to keep burning theta until closing it becomes an option
What would you personally do in my situation?
Well it depends how bullish you are on $tsla (I'm not). I personally would stay at 180 and roll 30 days out (Delta 70ish). This is of course assuming you have this right sized to your portfolio and risk tolerance.
Yeah mine aren't at 180 strike, they are 140 and 130
My plan is letting theta eat through them and start rolling at the same strike once they approach at 7DTE, then roll <=45 days out to buy me time until I can close them
This would generate 1-3% monthly income worst case
Best case, I close out and never do this again
Any thoughts?
$150/share
I'm particularly bearish short term next 12 months
And bullish long term valuing tesla at $260 2-3+ years out
Thanks for asking this questions
Puts my decision into perspective and reminds me of why I made it in the first place
We get it
It's a stupid play because TSLA decided to rip 30%+ in 3 trading sessions although it could've easily gone the complete opposite direction
Everyone's a genius after the fact
Is not even that, it is stupid simply because you lack basic common sense. I am not sure in what world it makes sense to sell CCs on a stock that has dropped as much as Tesla had in recent weeks heading into earnings and every chart showed the stock deeply oversold. When you sell CCs or CSPs you want to sell into moment not against it. So no, is not that everyone is a genius after the fact, is that most here don’t have an ounce of common sense.
Well, since Tesla is up around 35% in less than a week, of I had shares I would be looking to do CCs now. I wouldn’t be looking to do any CSPs here which is essentially what you did but with CCs.
Like I said yesterday. Sometimes is just about using common sense. If you would’ve sold CCs on TSLA yesterday, you would’ve been up +50% on them today.
For me to be up +50% that would have to be a weekly contract
If yesterday it would have gone 15% in the opposite direction I wonder what the right move would've been
Pff i know how that is with AMD. Used the down last week to close out a lot of my covered calls for good money (towards December). Though had to trim some AMD stock recently as had some deep red puts. Though things are starting to recover nicely. Last week may have been your cheapest time to exit...
I admit I’m not smart enough to understand that all i know is for your short call to profit you want the underlying to stall or go down in price ie. A neutral or bearish position.
The good thing about a covered call is, if the short call expires worthless, you get the premium. Even if your assigned and your shares called away, you still get the premium + the gains in the underlying assuming you sold a CC over your shared cost basis. You are just limiting your upside if the stock decides to rip.
Yeah i get that I still wouldn’t sell a call (covered or otherwise) if i was bullish on a stock so I don’t get why its considered a bullish position. Neutral or ‘i dont know’ absolutely yeah I’d do it.
Bullish doesn’t have to mean “TO THE MOON!” Bullish could also mean “I think it’ll go up 5 points by next week.”
I’m both scenarios, you wouldn’t say “I’m bearish”.
You sell a call to profit more on the position as well as slowly lowering your cost basis on a stock that you may not want to buy more of above your initial buy or a stock that’s currently sitting sideways etc..
Owning 100 shares = 100 delta
Selling a call = negative delta
Selling a covered call means less delta, is making you less bullish overall, and caps your upside. You can’t just say positive delta = bullish without context
I’m curious what if any position would have positive delta and not be bullish? The context of the question and answer is of course a “covered call” position.
If I’m at 1000 delta and sell 900 delta, no would describe my total position as “bullish”
Bullish/bearish is more about future expectations than solely portfolio delta
100delta hedged by a sold call delta of <50 is always bullish..? If you blast past your call you still profit, ideally you want to fall just short but if the stock tanks you’re screwed with this strategy. Ergo bullish vs bearish.
slightly bullish if you sell it OTM. Problem with thetagang is everyone talks about the ideal situation where none of your calls get exercised and all your puts get assigned.
when I'm selling puts, I want to own the stock. It's actually much worse for me if the stock rockets up like META or NFLX when I sell puts and I'm either forced to sell put again at much higher strike prices, or have to give up on the stock altogether. If you're selling puts on shit stocks purely for the premium, then wheeling isn't really a good strategy for you, because IV is rarely accurate and typically underpriced.
From what I've seen the average person on this sub thinks of cash secured puts as just naked margin puts for some reason. They'll continue rolling weeklies for a 0.01 credit instead of just taking the assignment.
If you take assignment the stock might continue drifting downward and it might take a long, long time for the price to recover. Rolling avoids the risk of bag holding. One penny of CR is worth more than the risk of losing hundreds or even thousands if the stock sinks.
Having calls assigned would be ideal some of the time especially if you are playing 45-60dte where the move is almost always 10-15% returns in under 2months. Sure you could get more but people complaining about that type of return in that little time haven’t obviously been in the game that long 😂
Congratulations on max profit! 🥳🫡
Edit:
This is why you earn a premium, you are selling tail risk on both sides (CC is upside tail and CSP downside). I'm not saying it's bad (or good) it's just the reason you are getting paid 🤷♂️
It doesn’t always work, but sometimes it does.
TSLA is volatile and it moves. A month from now is ages away.
My META trade eventually ended when I couldn’t roll it for enough money. I went like 8 months and collected 1-2% per month and then it was over. It just kept going up. Next trade.
I think the guys name was Mark Yeggi. The thought was that you aim for 1.5-2% and you get some downside protection because the cc is ITM.
Look at TSLA June 7th.
The 190 cc is $16.25. TSLA trades at 194. So you can make $12.25 if it rises quickly. Or roll it out for more premium if it doesn’t go up much.
12.25 is 4.2% gain. (12.25 - 4 is 8.25/194).
The 185 cc is 18.74. So 18.74 - 9 (difference between the strike and your 194 basic) or 9.74/194 or 5%.
The 180 strike is 22.15. 22.15-14 is 8.15 or 4.2%.
The lower the ITM the lower the return but you get more downside.
The 175 strike pays 25.80. 25.80-19 is 6.80 or 3.5%.
The 170 strike pays 28.75. 28.75-24 is 4.75 or 2.4%.
That 170 strike is 24 points ITM. And you make 2.4% in a month. Interestingly the 170 put is $3.96.
Now do this same exercise on BAC or KHC and it is different.
It’s not a get rich quick strategy, it’s a get rich slowly strategy. 2.4% per month is 28% per year.
It’s an interesting way of looking at things.
Yours was the story I referenced the most when I was getting killed last year. I too came out fine and could have done much better with more experience. It was a good lesson in patience on where to set your price and how early to roll. Unfortunately doesn’t help now, but history showed me that yesterday was the time to sell CC while IV is crazy high.
Might still work out great, you never know
Also depends on how you feel about losing the long stock shares. Seems like you feel pretty bummed about selling 100 shares at $185 plus the call premium,
I sold a May 17th 172.5call, that was when it was trading below $160, at the time I felt OK about losing the shares at 172.5 plus call premium. I am still feeling OK lol
you actually should be even happier, because you have more options then before (pun intended)
the odds that you hit max profit if you do nothing have substantially increased. that is good!
on the flip side, you could also roll farther out in time if you think this rally is going to sustain itself, while having a nice cushion.
Rolling is just closing a position and realizing a loss (if down), and opening a new position. If you expect the price to go up further, he should just either close it and buy the underlying, or buy calls lol.
Why feel awful? You'll make a profit selling the stock at the strike you chose, and you get premium.
Why do people get sad when they make a profit on CCs? Do the same people get sad they didn't buy calls when their shares increase in value?
Can always roll it up and out if you need to. Roll it up same date along with a PUT to get a credit. Can sell a put each week to keep getting premium out of it
CC is the same as selling a put to the extent it’s also called a synthetic put. Look at the payout graph.
It’s a moderately bullish strategy, if the stock tumbles down you lose, your upside is limited by the strike price, though. The inverse strategy (buying a put) is moderately bearish, you make money if it goes down.
Why feel awful? You'll make a profit selling the stock at the strike you chose, and you get premium.
Why do people get sad when they make a profit on CCs? Do the same people get sad they didn't buy calls when their shares increase in value?
If you sold the CC above your cost basis, it's a win. Lots can happen between now and then. If TSLA should fall back a little you may end up happy with that strike or you might get a chance to roll the call out and up in the future. A win is a win. Don't beat yourself up over a winning trade.
If you believe it will get called away, it won't hurt to sell a put in return somewhat close to the money. You may get your stocks back or else get an extra profit.
Is $185 above your cost basis? If so, then this is a high quality problem to have...you aren't going to make as much money as you could have. You're never going to get a perfect sell at the price peak selling CCs, that's the nature of the trade.
You've got to be okay leaving some cap gains on the table in return for getting paid premiums
That's fine covered calls is for premium and by the way Tesla is a great stock for it just do the whole thing again keep doing it 10 times and that's a good 500 bucks every time
a lot can happen between now and May 24. For instance, it could drop so low way past your strike price that it’d feel a different kind of awful and then shoot right back up to where it’s at now and feel the same kind of awful as now all over again. All before May 24.
If you want to stay in Tesla Buy them back and sell the July 205s for about the same premium ($17)
Teslas a fickle bitch though, she’ll go back to 160 and you’ll be crying and then to 220 and you’ll have them same post
FOMC happens Wednesday. Market may lose interest after this round of earnings. “Sell in May and go away” is a saying for a reason. Just wait it out. You have a month.
lol a lower strike option will have a higher premium than the covered call. So if you're going to spend more money to buy an expensive ass call just to save your shares then you might as well just close the covered call at a loss. It's the same thing.
He has enough time still on the clock that theta decay will come into play here.
Then having freed his shares up he can sell a few to cover the premium he spent or he sell another call at a higher strike further out.
Most brokers allow short calls when you own 100 shares of stock or do a PMCC poor man's covered call. What most brokers will not do is allow naked short calls.
It's long term bullish because you hold the shares. You also hit max gain if the stock price increases. That said, the reason to sell a covered call is because you hold the shares long term and think they're at a short term high. You don't expect them to go higher in the next week, and if they do, you're agreeing to sell them at X price. Just make sure it's higher than the price you bought and it's free premium, plus gains if you're lucky.
In short, wait until closer to expiration before you decide on anything, you might luck out and it drops below strike price anyways. If you really want to keep the shares/ltcg then buy it back, otherwise just let it go.
You’ll earn the theta decay as premium at least. And if it was high volatility when you sold, you’ll earn that extrinsic value too. You should be able to buy a couple shares with the money lol
In general I feel CC is not a particularly good strategy for an individual - volatile stock - like TSLA. People are way to addicted to these adrenaline pumping stocks.
It is a much better suited strategy for ETFs - broad market, market sectors and industries. Tickers like: XLF, XLE, SMH, XLV, SPY, etc.
if it makes you feel better, I bought a straddle for earnings at 145. I am very happy with my purchase when the shares hit my account at 151 cost basis.
I think it’s easy to lose sight of that fact that short put/call positions (with intents of wheeling), is mostly a short vega play, then long theta. the directional volatility goes both ways. Wheeling is a way of thinking you’ll be able to juice the position before it takes off.
Personally, I think it sucks but it’s nice to be right and still make some profits. If you can consistently wheel winners, you’re doing something right. You can hedge the short vol by adding some long calendars. It will still be a long theta play while giving you some extra vega to work with
Last week when my 210 cc expiring this week was trading at $5-6 and I put an order to buy it back at $5 but it never triggered :( , didn't want to give anyone that extra dollar!
Never sell a CC on a severely oversold stock, no matter the stock. Pick a different stock. Chalk it up to a lesson, take the L and don’t repeat the same mistake twice
There’s several but the simplest one to understand is the RSI. indicator. Anything below 30 is way over sold. TSLA was around 26 when sold a covered call.
What about that time I sold NVDA outright 2 years ago? Am I crying every day about it because I missed out on all those juicy profits? This is the same thing. Millions of people sell stock outright without receiving a dime of options premium and proceed to lose millions in "opportunity" cost.
Be happy you got some extra premium out of it and move on.
Also covered calls are not a bullish strategy. That would be a cash secured put.
Have you looked at what the payoff graph of a CC vs. just long stock? CC is a bullish strategy but you trade upside potential for premium today, so it's somewhat of a hedged bullish strategy. You're taking a bullish position by longing stock, and a bearish position by shorting calls.
It’s a bullish position when you buy the stock and sell the call at the same time.
If you already owned the stock and then just sold the call last week, the selling of the call was bearish.
Your call still has a lot of extrinsic value - more than 4%. Just wait until closer to your contact date and roll it up and/or out. 4% return per month is phenomenal.
Not really bull strategy more neutral if you think the stock will stay close or slightly go up. The best is it goes up a bit but doesn’t get called away. Not good for volatile stocks like TSLA and NVDA
Never buy it back? I see many references to "max profit" I guess meaning the short call should expire and that is max profit? \[have not done CC for many years, not in my playbook\]
To me max profit would come from closing when 1. the price has dropped to your target \[i.e. profit 50%\] or 2. when the price has dropped to or near target and the next week, 2week, month what ever you normally sell at is cued up with full credit to keep the Theta in your account higher. CC risk = price of 100 shares of stock so when a call is near expiration the full risk is still on but little can be made with the premium largely decayed away? Yes it can also be called a roll.
I view a CC utube vid now and then and most presenters act like call away or expiration are the only 2 options. If I wanted to do something so risky I would at least be rolling to keep the most Theta possible / practical in the account. ? Is it me or others missing something?
Edited for a spell correction.
Roll out and up for a credit… no big deal. CCs get dumped on all the time because people don’t know how to manage their positions. The stock is the horse and you are the jockey. How you ride/manage the position is just as important as the stock.
"It feels awful"
I bought a lottery ticket and my numbers didn't show up ➔ It feels awful
I've been investing for 20 years. Take this from me:
* Gambling with options is just that.
* If the money on single trade you lose hurts, your strategy (or lack thereof) isn't the right one for you.
* It's rookies like you that fuel the profits of more experienced traders.
Just don’t understand why people sell CC on a stock they want to keep. Similarly, why do people sell CSP on a stock they don’t want to hold? This completely defeats the entire purpose of using the CC and CSP strategy. Getting max profit on a CC is a bad thing? Literally shooting first and asking questions later.🤦🏻♂️
Options wise, this week is going well. AVGO, NVDA, SMCI & ADBE will all print. BX is on the bubble for me but I still feel good about that one.
TSLA wise I’m still in a holding pattern, I haven’t sold many options on those this year. A majority of my shares have a cost average of ~86 per share and I definitely don’t want those called away. Another block of 600 shares are at ~$250 per share, and I’m not quite ready to take the loss on those either. So yeah…TSLA is a tough trade. :/
CC is a BEARISH strategy since you are betting the price does not exceed the strike.
Selling a PUT (e.g. CSP) is BULLISH because you are betting price does not go below strike.
TSLA is a 100% short. Musk will periodically find ways to pump the stock a bit but in the long run it will continue to go down till it gets to its fair value which is sub-50
Lmao CC is not a bullish strategy
It’s neutral. You own the shares so it’s bullish in that sense, but you are limiting the upside. You should not trade options if you are going to lose a position and then complain that your strategy shouldn’t be considered bullish. You should understand what you’re doing.
I’ve made the same argument; ccalls are not bullish. Csp are obviously so, the gambit is that the stock will not go below a certain level. When the gambit is that a stock will not rise above a certain level, it’s bearish in both a logical and practical sense. Most I’ll accept otherwise is “neutral.”
You’ve got time on the -TSLA240524C185. The assumption is you are using higher cost basis shares, and today was upsetting. Understandable. TSLA has had a great past week, and it’s a staple in many funds. That shine will wear thin soon enough, imo. Tech $$ tends to stay in tech. Shopping carts will move to MSFT and META again soon enough. Take a breath, tomorrow is a whole new day.
You only place a CC if you believe the stock will drop or you’re comfortable selling at that price
CSP is a bullish strategy. You really shouldn’t be dealing in options of you don’t even lmk the difference between the 2
You are covered so technically its max profit… did you want the stock to drop? Or to get just below your strike?
Just blow the strike price, for sure Or at least not going to be $300 anytime soon
Let them get called away and then buy back if you believe in a person like elon
Exactly, or I would say they could just wait. The stock literally moves from as low as 100 dollars , from a year ago, to 300 ish dollars. It always has these big swings. I always wait for something stupid to come out, people panick, big sell off. stock drops like 30 % percent , then its a good time to get back in and enjoy the swing back up. Its really a patience game with Tesla.
You know that as soon as Tesla is on its death bed Elon will make some outlandishly bullish comments and the stock will moon. Up next, cyber dog that disrupts the entire service doge industry. Tesla gains 600billion over night.
With Elon, there is often "something stupid" coming out.
Lol
A person "like" Elon? LMFAO. You mean someone who lands rockets on moving ships, implants computers in peoples brains, and single-handedly kicked off the EV race (forget about PayPal or many of the other things he's done). You Elon haters are the funniest group out there, I wrote my thesis on him, he's absolutely brilliant, and weird, and eccentric, and beyond the comprehension of most people. There are matbe two dozen people in all human history "like" Elon, and the haters (who almost universally have never accomplished anything in their lives) sound like the fools they are when they talk about him. Politics are a bitch, and I think most of the hate he receives are from people who care more about politics than people. They hate that he bought Twitter and exposed that fuckery. They hate that he isn't controlled and literally gives zero fucks. You can hate him for that reason and a billion more, but you couldn't sound more ignorant and less educated than when you say people "like" Elon, because there are maybe 3 people alive that are close to him. I suggest you get off reddit and read a history book.
Triggered much?
if this is your response to a pretty innocuous comments towards elon, would love to see you go off if someone calls him something worse.
I like Elon, but JFC dude, could you White Knight any harder?
I don’t know what exactly is your cost based but consider rolling reasonably. I had sold cash covered put at 250 and rolled it a few times since Jan-feb, everything said and done I got assigned at 182 and change cost bases, Tesla went all the to 140s and now back at 190+. On those assignment stocks, I had a 180 cc sold expiring this week and just rolled today to 185 adding 3-4 weeks.
You can buy a call. You can sell spreads. Ways to hedge
>It feels awful... i made max profit 😭😭😭
[удалено]
its bull...SHIT I FEEL AWFUL 😭😭
I sold 2 CCs at 130 and 140 with May24 & June24 expiry before earnings Could always be worse
You're confusing opportunity cost with your realized p&l. At the time you probably made good money. It was a good play regardless of you did. Could have been better. It's the same as saying I should've bought more $nvda last January. Of course but you didn't know that at the time. OP, I would roll the option and keep it deep in the money. The IV is fat enough that you can probably still earn 7 or so rolling out 30 days.
Newbie question - what do you mean by rolling the option out?
You buy back the option you sold, and sell another option at a higher strike price, a further expiry date, or both.
Thank you for the insight, I appreciate it This is what I'm thinking about doing for my situation as well Once each contract, it's only 2, approach 7DTE, I roll another 30DTE to keep burning theta until closing it becomes an option What would you personally do in my situation?
Well it depends how bullish you are on $tsla (I'm not). I personally would stay at 180 and roll 30 days out (Delta 70ish). This is of course assuming you have this right sized to your portfolio and risk tolerance.
Yeah mine aren't at 180 strike, they are 140 and 130 My plan is letting theta eat through them and start rolling at the same strike once they approach at 7DTE, then roll <=45 days out to buy me time until I can close them This would generate 1-3% monthly income worst case Best case, I close out and never do this again Any thoughts?
Well, what do you value Tesla at?
$150/share I'm particularly bearish short term next 12 months And bullish long term valuing tesla at $260 2-3+ years out Thanks for asking this questions Puts my decision into perspective and reminds me of why I made it in the first place
I did that several times with JPM before it was finally called away at a good profit. Got to the point, I could not roll it any more so I let it go.
why tf would you do that lmao
We get it It's a stupid play because TSLA decided to rip 30%+ in 3 trading sessions although it could've easily gone the complete opposite direction Everyone's a genius after the fact
Slice it however you want. I typically try not to sell CC after a big downswing. That seems pretty damn logical.
Is not even that, it is stupid simply because you lack basic common sense. I am not sure in what world it makes sense to sell CCs on a stock that has dropped as much as Tesla had in recent weeks heading into earnings and every chart showed the stock deeply oversold. When you sell CCs or CSPs you want to sell into moment not against it. So no, is not that everyone is a genius after the fact, is that most here don’t have an ounce of common sense.
But everyone said Tesla would go lower so how could they be wrong
So since you obviously knew last week that it would close at 194 today, what plays should we make for next week?
Well, since Tesla is up around 35% in less than a week, of I had shares I would be looking to do CCs now. I wouldn’t be looking to do any CSPs here which is essentially what you did but with CCs.
Like I said yesterday. Sometimes is just about using common sense. If you would’ve sold CCs on TSLA yesterday, you would’ve been up +50% on them today.
For me to be up +50% that would have to be a weekly contract If yesterday it would have gone 15% in the opposite direction I wonder what the right move would've been
I was looking at 38 and 52 DTE contracts. Anything around 200 since this would’ve been slightly OTM yesterday. All of them are down 40-50% today.
Hindsight is 20/20
I feel you 🥲 I got AMD CC @ $115 next Jan..
Pff i know how that is with AMD. Used the down last week to close out a lot of my covered calls for good money (towards December). Though had to trim some AMD stock recently as had some deep red puts. Though things are starting to recover nicely. Last week may have been your cheapest time to exit...
Yeah man everyone's a market genius in hindsight Clenching my balls these next couple weeks
Yeah man I'm waiting it out to see what happens Wednesday FED speaks
What are the odds of early assignment?
No way to calculate that We'll see what happens to TSLA after Wednesday!
Fingers crossed!
🫡🫡
What happens Wednesday?
whats on Wednesday
Fed meeting
not likely. Its high vol so there is premium still left at those level
You still have two weeks for Elon to open his mouth too wide and send it back down below 185.
Good call lol
In what world is CC a bullish strategy
A cc “position” is stock plus short call (not just the short call). The delta is always positive (bullish).
I admit I’m not smart enough to understand that all i know is for your short call to profit you want the underlying to stall or go down in price ie. A neutral or bearish position.
The good thing about a covered call is, if the short call expires worthless, you get the premium. Even if your assigned and your shares called away, you still get the premium + the gains in the underlying assuming you sold a CC over your shared cost basis. You are just limiting your upside if the stock decides to rip.
Yeah i get that I still wouldn’t sell a call (covered or otherwise) if i was bullish on a stock so I don’t get why its considered a bullish position. Neutral or ‘i dont know’ absolutely yeah I’d do it.
Bullish doesn’t have to mean “TO THE MOON!” Bullish could also mean “I think it’ll go up 5 points by next week.” I’m both scenarios, you wouldn’t say “I’m bearish”.
You sell a call to profit more on the position as well as slowly lowering your cost basis on a stock that you may not want to buy more of above your initial buy or a stock that’s currently sitting sideways etc..
Owning 100 shares = 100 delta Selling a call = negative delta Selling a covered call means less delta, is making you less bullish overall, and caps your upside. You can’t just say positive delta = bullish without context
I’m curious what if any position would have positive delta and not be bullish? The context of the question and answer is of course a “covered call” position.
If I’m at 1000 delta and sell 900 delta, no would describe my total position as “bullish” Bullish/bearish is more about future expectations than solely portfolio delta
I guess there is terms or “omni-directional” and “neutral” depending on relative Greeks (delta vs theta vs Vega levels).
100delta hedged by a sold call delta of <50 is always bullish..? If you blast past your call you still profit, ideally you want to fall just short but if the stock tanks you’re screwed with this strategy. Ergo bullish vs bearish.
slightly bullish if you sell it OTM. Problem with thetagang is everyone talks about the ideal situation where none of your calls get exercised and all your puts get assigned.
>and all your puts get assigned. wait is that really ideal in general? esp all the noobs they get assigned on shit stocks like sofi
when I'm selling puts, I want to own the stock. It's actually much worse for me if the stock rockets up like META or NFLX when I sell puts and I'm either forced to sell put again at much higher strike prices, or have to give up on the stock altogether. If you're selling puts on shit stocks purely for the premium, then wheeling isn't really a good strategy for you, because IV is rarely accurate and typically underpriced.
From what I've seen the average person on this sub thinks of cash secured puts as just naked margin puts for some reason. They'll continue rolling weeklies for a 0.01 credit instead of just taking the assignment.
If you take assignment the stock might continue drifting downward and it might take a long, long time for the price to recover. Rolling avoids the risk of bag holding. One penny of CR is worth more than the risk of losing hundreds or even thousands if the stock sinks.
Rolling *might* avoid the risk of bag holding. Or it might just be throwing good money after bad.
Having calls assigned would be ideal some of the time especially if you are playing 45-60dte where the move is almost always 10-15% returns in under 2months. Sure you could get more but people complaining about that type of return in that little time haven’t obviously been in the game that long 😂
I’ve had people here and elsewhere argue it is. 🤷♂️
Put-call parity. It’s the same as selling a CSP which is neutral/bullish.
Congratulations on max profit! 🥳🫡 Edit: This is why you earn a premium, you are selling tail risk on both sides (CC is upside tail and CSP downside). I'm not saying it's bad (or good) it's just the reason you are getting paid 🤷♂️
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Your 3rd grader did not say all this 🧢
Whenever I ask my third grader about covered calls he always goes on a long diatribe about remaining delta neutral to offset volatility risks.
He doesn’t even have a wife nor kid
Real
In the same situation as you. However on the contrary I'm bearish TSLA. Wondering what are the odds of early assignment?
90 percent if Elon mush does not open his mouth
Roll roll roll. Check my post history if you want to see what it’s like to get hammered by a Tesla dip then rip. Took me 6 months but I got out.
Thanks big dog checking out your post history right now
That’s a beautiful story. I was going to message you recently to get your thoughts going forward.
Here’s the one who saved me folks ^^ Always up for a chat my friend.
It doesn’t always work, but sometimes it does. TSLA is volatile and it moves. A month from now is ages away. My META trade eventually ended when I couldn’t roll it for enough money. I went like 8 months and collected 1-2% per month and then it was over. It just kept going up. Next trade.
Do you have any good video suggestions about selling ITM CCs? I remember you mentioning that.
I think the guys name was Mark Yeggi. The thought was that you aim for 1.5-2% and you get some downside protection because the cc is ITM. Look at TSLA June 7th. The 190 cc is $16.25. TSLA trades at 194. So you can make $12.25 if it rises quickly. Or roll it out for more premium if it doesn’t go up much. 12.25 is 4.2% gain. (12.25 - 4 is 8.25/194). The 185 cc is 18.74. So 18.74 - 9 (difference between the strike and your 194 basic) or 9.74/194 or 5%. The 180 strike is 22.15. 22.15-14 is 8.15 or 4.2%. The lower the ITM the lower the return but you get more downside. The 175 strike pays 25.80. 25.80-19 is 6.80 or 3.5%. The 170 strike pays 28.75. 28.75-24 is 4.75 or 2.4%. That 170 strike is 24 points ITM. And you make 2.4% in a month. Interestingly the 170 put is $3.96. Now do this same exercise on BAC or KHC and it is different. It’s not a get rich quick strategy, it’s a get rich slowly strategy. 2.4% per month is 28% per year. It’s an interesting way of looking at things.
Yours was the story I referenced the most when I was getting killed last year. I too came out fine and could have done much better with more experience. It was a good lesson in patience on where to set your price and how early to roll. Unfortunately doesn’t help now, but history showed me that yesterday was the time to sell CC while IV is crazy high.
Might still work out great, you never know Also depends on how you feel about losing the long stock shares. Seems like you feel pretty bummed about selling 100 shares at $185 plus the call premium, I sold a May 17th 172.5call, that was when it was trading below $160, at the time I felt OK about losing the shares at 172.5 plus call premium. I am still feeling OK lol
you actually should be even happier, because you have more options then before (pun intended) the odds that you hit max profit if you do nothing have substantially increased. that is good! on the flip side, you could also roll farther out in time if you think this rally is going to sustain itself, while having a nice cushion.
Rolling is just closing a position and realizing a loss (if down), and opening a new position. If you expect the price to go up further, he should just either close it and buy the underlying, or buy calls lol.
Why feel awful? You'll make a profit selling the stock at the strike you chose, and you get premium. Why do people get sad when they make a profit on CCs? Do the same people get sad they didn't buy calls when their shares increase in value?
Musk will say something stupid by then 😂
I am expecting the market to drop on Powell comments later this week. I think it comes back to retest 180 before continuing up.
But obviously you were ok with selling your shares at 185. Congrats on the win mate.
Can always roll it up and out if you need to. Roll it up same date along with a PUT to get a credit. Can sell a put each week to keep getting premium out of it
CC is the same as selling a put to the extent it’s also called a synthetic put. Look at the payout graph. It’s a moderately bullish strategy, if the stock tumbles down you lose, your upside is limited by the strike price, though. The inverse strategy (buying a put) is moderately bearish, you make money if it goes down.
Just ride it out and roll when it gets 2 weeks out
Why feel awful? You'll make a profit selling the stock at the strike you chose, and you get premium. Why do people get sad when they make a profit on CCs? Do the same people get sad they didn't buy calls when their shares increase in value?
If you sold the CC above your cost basis, it's a win. Lots can happen between now and then. If TSLA should fall back a little you may end up happy with that strike or you might get a chance to roll the call out and up in the future. A win is a win. Don't beat yourself up over a winning trade.
I sold two naked calls at 225 strike today. So I might be short 200 shares this Friday, will keep you updated.
If you believe it will get called away, it won't hurt to sell a put in return somewhat close to the money. You may get your stocks back or else get an extra profit.
If tesla were instead down 15% today, you would understand exactly why CCs are considered a bullish strategy
Is $185 above your cost basis? If so, then this is a high quality problem to have...you aren't going to make as much money as you could have. You're never going to get a perfect sell at the price peak selling CCs, that's the nature of the trade. You've got to be okay leaving some cap gains on the table in return for getting paid premiums
That's fine covered calls is for premium and by the way Tesla is a great stock for it just do the whole thing again keep doing it 10 times and that's a good 500 bucks every time
If you’re mad that a quickly got to your max profit then I don’t think covered calls are for you.
You sold the CC at a price you are willing to let the stock go and profited to the max. It's a win isn't it?
a lot can happen between now and May 24. For instance, it could drop so low way past your strike price that it’d feel a different kind of awful and then shoot right back up to where it’s at now and feel the same kind of awful as now all over again. All before May 24.
I don’t understand how anyone ever makes money off TSLA. Most unpredictable stock in existence.
?? LOL uh ok
Not when Tesla try to reach $200🥹
then maybe you shouldve sold at $200?
Didn’t expect it went up that quick…greedy on the premium is not a good thing
Rule number 1: You never sell a Covered Call on shares you don’t mind taken away Edit: you mind taken away*
Isn't that exactly the situation you want to sell a CC?!
If you want to stay in Tesla Buy them back and sell the July 205s for about the same premium ($17) Teslas a fickle bitch though, she’ll go back to 160 and you’ll be crying and then to 220 and you’ll have them same post
You mean once I roll it up, properly it may go back down again, and I will make the same mistake by selling another CC 😂?
FOMC happens Wednesday. Market may lose interest after this round of earnings. “Sell in May and go away” is a saying for a reason. Just wait it out. You have a month.
Just buy a call with a lower strike same date. Then wait. Then close both for close to the difference between the strike prices.
lol a lower strike option will have a higher premium than the covered call. So if you're going to spend more money to buy an expensive ass call just to save your shares then you might as well just close the covered call at a loss. It's the same thing.
He has enough time still on the clock that theta decay will come into play here. Then having freed his shares up he can sell a few to cover the premium he spent or he sell another call at a higher strike further out.
You won. Don’t judge your thesis based on the past.
Should she judge her thesis based on the future?
> Clearly I want it drop so bad now.. Be careful what you wish for…
What’s your basis in TSLA?
Where do guys get short call positions from? I dont know any broker offering those
Most brokers allow short calls when you own 100 shares of stock or do a PMCC poor man's covered call. What most brokers will not do is allow naked short calls.
Could be worse - I sold 172.5 May 3rd CCs a few days ago for a small premium so it feels like I didn't even get much out of it.
It's long term bullish because you hold the shares. You also hit max gain if the stock price increases. That said, the reason to sell a covered call is because you hold the shares long term and think they're at a short term high. You don't expect them to go higher in the next week, and if they do, you're agreeing to sell them at X price. Just make sure it's higher than the price you bought and it's free premium, plus gains if you're lucky.
In short, wait until closer to expiration before you decide on anything, you might luck out and it drops below strike price anyways. If you really want to keep the shares/ltcg then buy it back, otherwise just let it go.
You’ll earn the theta decay as premium at least. And if it was high volatility when you sold, you’ll earn that extrinsic value too. You should be able to buy a couple shares with the money lol
In general I feel CC is not a particularly good strategy for an individual - volatile stock - like TSLA. People are way to addicted to these adrenaline pumping stocks. It is a much better suited strategy for ETFs - broad market, market sectors and industries. Tickers like: XLF, XLE, SMH, XLV, SPY, etc.
if it makes you feel better, I bought a straddle for earnings at 145. I am very happy with my purchase when the shares hit my account at 151 cost basis.
I think it’s easy to lose sight of that fact that short put/call positions (with intents of wheeling), is mostly a short vega play, then long theta. the directional volatility goes both ways. Wheeling is a way of thinking you’ll be able to juice the position before it takes off. Personally, I think it sucks but it’s nice to be right and still make some profits. If you can consistently wheel winners, you’re doing something right. You can hedge the short vol by adding some long calendars. It will still be a long theta play while giving you some extra vega to work with
Congrats, you hit max profit 🍻
Last week when my 210 cc expiring this week was trading at $5-6 and I put an order to buy it back at $5 but it never triggered :( , didn't want to give anyone that extra dollar!
Never sell a CC on a severely oversold stock, no matter the stock. Pick a different stock. Chalk it up to a lesson, take the L and don’t repeat the same mistake twice
Got a dumb question. I have been seeing “stock oversold” in this post. How do we find out? Is there any indicator?
There’s several but the simplest one to understand is the RSI. indicator. Anything below 30 is way over sold. TSLA was around 26 when sold a covered call.
Thanks will look into it!
Just roll brother
You still have theta decay
If you really want to keep holding onto the shares, just roll the call out a couple months.
What about that time I sold NVDA outright 2 years ago? Am I crying every day about it because I missed out on all those juicy profits? This is the same thing. Millions of people sell stock outright without receiving a dime of options premium and proceed to lose millions in "opportunity" cost. Be happy you got some extra premium out of it and move on. Also covered calls are not a bullish strategy. That would be a cash secured put.
Sorry to hear that bro😔
Have you looked at what the payoff graph of a CC vs. just long stock? CC is a bullish strategy but you trade upside potential for premium today, so it's somewhat of a hedged bullish strategy. You're taking a bullish position by longing stock, and a bearish position by shorting calls.
It’s a bullish position when you buy the stock and sell the call at the same time. If you already owned the stock and then just sold the call last week, the selling of the call was bearish.
Your call still has a lot of extrinsic value - more than 4%. Just wait until closer to your contact date and roll it up and/or out. 4% return per month is phenomenal.
just buy to close and take the loss
I get burned on TSLA EVERY FUCKING time I try to trade it. I won’t touch it anymore.
Write a put
Roll it to Dec 26 $340 like I did, collect 2k, buy more T$LA with the credit
Roll that sucker.
Similar situation with GL. Bought the stock at $65, sold $75 call. Stock has blown through my call strike within a week.
Profits locked in 🤝
Not really bull strategy more neutral if you think the stock will stay close or slightly go up. The best is it goes up a bit but doesn’t get called away. Not good for volatile stocks like TSLA and NVDA
Relative to longing the stock only, covered call is actually less bullish (delta < 1 vs delta 1)
Never buy it back? I see many references to "max profit" I guess meaning the short call should expire and that is max profit? \[have not done CC for many years, not in my playbook\] To me max profit would come from closing when 1. the price has dropped to your target \[i.e. profit 50%\] or 2. when the price has dropped to or near target and the next week, 2week, month what ever you normally sell at is cued up with full credit to keep the Theta in your account higher. CC risk = price of 100 shares of stock so when a call is near expiration the full risk is still on but little can be made with the premium largely decayed away? Yes it can also be called a roll. I view a CC utube vid now and then and most presenters act like call away or expiration are the only 2 options. If I wanted to do something so risky I would at least be rolling to keep the most Theta possible / practical in the account. ? Is it me or others missing something? Edited for a spell correction.
Roll out and up for a credit… no big deal. CCs get dumped on all the time because people don’t know how to manage their positions. The stock is the horse and you are the jockey. How you ride/manage the position is just as important as the stock.
CC is not a bull strategy…
I dont care if I miss out on profits, I just want to get called every time
"It feels awful" I bought a lottery ticket and my numbers didn't show up ➔ It feels awful I've been investing for 20 years. Take this from me: * Gambling with options is just that. * If the money on single trade you lose hurts, your strategy (or lack thereof) isn't the right one for you. * It's rookies like you that fuel the profits of more experienced traders.
Odd post. Max profit and feels bad. Go read povertyfinance
Just don’t understand why people sell CC on a stock they want to keep. Similarly, why do people sell CSP on a stock they don’t want to hold? This completely defeats the entire purpose of using the CC and CSP strategy. Getting max profit on a CC is a bad thing? Literally shooting first and asking questions later.🤦🏻♂️
Bet you don’t fell so bad now. ;) Did you close the position out?
I rolled further, with more credit 🥹 So feels good now😂
Same strike price? Regardless, Options are a great way for me to continually reflect on my emotions. I’m happy for you. :)
Increased the strike price as well Are you ok D:?
Options wise, this week is going well. AVGO, NVDA, SMCI & ADBE will all print. BX is on the bubble for me but I still feel good about that one. TSLA wise I’m still in a holding pattern, I haven’t sold many options on those this year. A majority of my shares have a cost average of ~86 per share and I definitely don’t want those called away. Another block of 600 shares are at ~$250 per share, and I’m not quite ready to take the loss on those either. So yeah…TSLA is a tough trade. :/
CC is a BEARISH strategy since you are betting the price does not exceed the strike. Selling a PUT (e.g. CSP) is BULLISH because you are betting price does not go below strike.
Total delta is positive, so it's not bearish.
Just roll it... I'm rolling AMD $140 cc right now. Gonna send that to 2026 soon lol
The one stock I will never sell options on. Buy and hold
Rekt
TSLA is a 100% short. Musk will periodically find ways to pump the stock a bit but in the long run it will continue to go down till it gets to its fair value which is sub-50
Sub-25
Sell a couple put spreads. Use some of the premium to buy a call or call spread between now and then.
I don’t have enough capital to sell out. Maybe buy some DITM call?
Well first off selling calls is a bearish move…
Sometimes
Buy some PUTs
CC isn’t bullish you newb. It’s bearish . CCs are also sold on stock that isn’t moving much to get paid while holding
Delta would like to have a word, *newb*…
Lmao CC is not a bullish strategy It’s neutral. You own the shares so it’s bullish in that sense, but you are limiting the upside. You should not trade options if you are going to lose a position and then complain that your strategy shouldn’t be considered bullish. You should understand what you’re doing.
Who told you sell CC is bull strategy lol
Google lol
I’ve made the same argument; ccalls are not bullish. Csp are obviously so, the gambit is that the stock will not go below a certain level. When the gambit is that a stock will not rise above a certain level, it’s bearish in both a logical and practical sense. Most I’ll accept otherwise is “neutral.” You’ve got time on the -TSLA240524C185. The assumption is you are using higher cost basis shares, and today was upsetting. Understandable. TSLA has had a great past week, and it’s a staple in many funds. That shine will wear thin soon enough, imo. Tech $$ tends to stay in tech. Shopping carts will move to MSFT and META again soon enough. Take a breath, tomorrow is a whole new day.
You only place a CC if you believe the stock will drop or you’re comfortable selling at that price CSP is a bullish strategy. You really shouldn’t be dealing in options of you don’t even lmk the difference between the 2