Selling Premium on TSLA!!

[The Banker]

I don't know if people here like selling options, but with this insanely high IV, and TSLA with already having high priced options, both puts and calls on TSLA are outrageously over priced.
Example this morning APR 3 700 calls were as high as $4, in this weak market I find it hard to believe TSLA will go to 700 in 2 weeks.

Puts are even better APR 3 150 puts were at $5-6 the other day when TSLA was at 380. Right now an APR 3 200P is at $5. TSLA will get bought up before it goes to 200 by APR 3, IMO.

I've been legging into wide strangles on this thing for the past 2 weeks.

Don't say I never did anything for ya!

PS selling naked premium can be a very dangerous strategy if you don't know what you're doing. Control your size, assess your risk.

 

[BuckToothMoron]

The option market is whack right now. Premiums on the put side are huge. Personally I’d never go naked selling uncovered, but I think your strategy is sound.....almost free money....unless?

just for fun I bought 1 contract of leap puts at $5 strike on TSLA. The company would have to go bankrupt for me to get a 5x return. Tesla is up like $30 since I bought it, yet the contract is up! Can you say bearish sentiment?

I am waiting for the VIX to mellow before wading back in more aggressively, because I think we have at least another 15-20% downside.

 

[The Banker]

The option market is whack right now. Premiums on the put side are huge. Personally I’d never go naked selling uncovered, but I think your strategy is sound.....almost free money....unless?

just for fun I bought 1 contract of leap puts at $5 strike on TSLA. The company would have to go bankrupt for me to get a 5x return. Tesla is up like $30 since I bought it, yet the contract is up! Can you say bearish sentiment?

I am waiting for the VIX to mellow before wading back in more aggressively, because I think we have at least another 15-20% downside.

"Almost free money" that's the way I look at it, unless shit goes nuclear like say a crazy virus rips through the world!

I'm pretty experienced with this type of trading and would only sell shorter term options now, also you can roll them if you get in trouble, so you can add a week or 2 of extra time and get your strike higher or lower. Still it can be a risky strategy if you don't use patience and take small size, also you take them off when 50-80% of the premium has decayed, rarely do I hold them to expiration.
Like right now, if the market/TSLA pops up on monday or this week, I will look to sell another call at the 700 strike, or even higher depending. If TSLA dumps out then I will sell a put at the 150 or 200.

I think you got a good entry on your Put, that thing can gain some nice premium if TSLA drops and it doesn't even need to be ITM to have a 2-3x gain.

I agree that we have some more downside, I am looking for TSLA to go to 200 or so and then I will buy some long term. If it doesn't get to that level, and goes up, it will go without me and I'll just buy other stocks.