With Tesla's Stock Split, It's Now Easier To Short Puts And Calls For Income

Barchart2022-08-29

The 3-for-1 stock split with the Tesla Inc (TSLA) stock, which went into effect today (Aug. 26) makes it easier to create income by shorting covered calls and cash-secured puts. This is because less ...

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Comments

Sphere
2022-08-29
Sphere
Buy buy buy
4West
2022-08-29
4West
Gosh....
Gcwj
2022-08-29
Gcwj
Short Tesla
BlitzBison
2022-08-29
BlitzBison
Ok
pjetan
2022-08-29
pjetan
🙏🏻
Desmond669
2022-08-29
Desmond669
Buy la cheap

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This is because less ...</p>\n\n<a href=\"https://www.barchart.com/story/news/9891803/with-tesla-s-stock-split-it-s-now-easier-to-short-puts-and-calls-for-income\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"TSLA","symbol_name":"特斯拉","start_time":0,"source_url":"https://www.barchart.com/story/news/9891803/with-tesla-s-stock-split-it-s-now-easier-to-short-puts-and-calls-for-income","article_id":"1104915715","we_media_id":null,"thumbnails":[],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=1104915715","pubTimestamp":1661740144,"sourceInfo":null,"weMediaInfo":null,"summary":"The 3-for-1 stock split with the Tesla Inc (TSLA) stock, which went into effect today (Aug. 26) make","collect":0,"end_time":0,"defaultTopTitle":"barchart.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"TSLA":"特斯拉"},"translate_title":"随着特斯拉股票的拆分，现在做空看跌期权和呼吁收益变得更容易了","themeId":"","isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"TSLA":0.9},"content_text":"The 3-for-1 stock split with the Tesla Inc (TSLA) stock, which went into effect today (Aug. 26) makes it easier to create income by shorting covered calls and cash-secured puts. This is because less money has to be put up as collateral.To sell a covered call on TSLA stock an investor has to first buy 100 shares and then sell an out-of-the-money (OTM) call option. So, now, at $290.50, the investor purchases $29,050 of shares and then shorts an OTM call. That cost is now one-third less than it used to be.For example, look at the Barchart call option table below.TSLA - Call Options - Sept. 30 expiration - As of Aug. 26This shows that the Sept. 30 calls at the $305 strike price, which is 5.0% over today's price will bring in $12.98 per contract. That represents a yield of 4.468% on the cost of the covered call shares of $290.50.That is a very high yield and implies that the investor could make a return of almost 10% if the stock rises just 5%. Moreover, the investor no longer has to pony up over $90,000 just to make a covered call return. By putting up one-third less capital, the investor now has more flexibility. So, for $29,050, the investor will receive $1,298 when he shorts this covered call.Moreover, the $12.98 premium provides a good deal of downside protection. TSLA stock would have to fall to $277.52 before the breakeven point is reached. And that has to occur in just 35 days at the end of Sept. 30.Shorting Cash-Secured Puts Is Even Easier NowNow it is even easier to short OTM puts to create income. For example, look at the put option chain for Sept. 30 below.TSLA - Puts - Expiring Sept. 30 - As of Aug. 26This shows that the investor now has to put up just $28,000 (at the strike price of $280) in order to earn $1,283 in short put income. That is now one-third-less cash that has to be secured at a brokerage firm in order to guarantee that 100 shares (per put contract) can be purchased at $280 per share.This also represents a 4.58% return on investment (i.e., $1,283 / $28,000) at a strike price which is 3.6% below today's price. It provides a very nice breakeven cushion as well. For example, the stock will have to fall to $267.17, or 8.0% below today's price before the breakeven point is reached.So by only having to secure one-third less cash for these juicy returns TSLA investors can make good potential income given the recent stock split.","kind":null,"is_publish_news":true,"is_publish_highlight":true,"is_publish_live":null,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[{"id":9997186530,"gmtCreate":1661761970824,"gmtModify":1676536574333,"author":{"id":"3573432013960035","authorId":"3573432013960035","name":"Sphere","avatar":"https://static.laohu8.com/default-avatar.jpg","vip":1,"hat":"https://static.tigerbbs.com/b073a07f77dbe6b3bec6b12311fde6bd","crmLevel":4,"crmLevelSwitch":0},"htmlText":"Buy buy buy","listText":"Buy buy buy","text":"Buy buy buy","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9997186530","repostId":1104915715,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9997139481,"gmtCreate":1661756562048,"gmtModify":1676536573627,"author":{"id":"4112575701443832","authorId":"4112575701443832","name":"4West","avatar":"https://community-static.tradeup.com/news/4f1621f91b85bb6814f52425dfbe6add","vip":1,"crmLevel":2,"crmLevelSwitch":0},"htmlText":"Gosh....&nbsp;","listText":"Gosh....&nbsp;","text":"Gosh....","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":2,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9997139481","repostId":1104915715,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9997195834,"gmtCreate":1661755182531,"gmtModify":1676536573508,"author":{"id":"4099126468711710","authorId":"4099126468711710","name":"Gcwj","avatar":"https://static.tigerbbs.com/01f02847a2734e30f9c0ed8ef62da392","vip":1,"hat":"https://static.tigerbbs.com/7b75ce0c34afff716602792a5d0929dd","crmLevel":1,"crmLevelSwitch":1},"htmlText":"Short Tesla","listText":"Short Tesla","text":"Short Tesla","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":2,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9997195834","repostId":1104915715,"repostType":2,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9997190356,"gmtCreate":1661754087179,"gmtModify":1676536573323,"author":{"id":"4096589756885460","authorId":"4096589756885460","name":"BlitzBison","avatar":"https://community-static.tradeup.com/news/2c711017cde68be46bd029006fcefb6c","vip":1,"crmLevel":7,"crmLevelSwitch":0},"htmlText":"Ok","listText":"Ok","text":"Ok","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9997190356","repostId":1104915715,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9997104440,"gmtCreate":1661753776583,"gmtModify":1676536573291,"author":{"id":"3581854579020344","authorId":"3581854579020344","name":"pjetan","avatar":"https://static.tigerbbs.com/0dbe4c402957fcc269723fb9e3c423c2","vip":1,"crmLevel":2,"crmLevelSwitch":0},"htmlText":"🙏🏻","listText":"🙏🏻","text":"🙏🏻","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":3,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9997104440","repostId":1104915715,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9997370468,"gmtCreate":1661749673756,"gmtModify":1676536572756,"author":{"id":"3562118563279867","authorId":"3562118563279867","name":"Desmond669","avatar":"https://static.tigerbbs.com/e2484115c94d3471cb46f20ea7598b4a","vip":1,"crmLevel":3,"crmLevelSwitch":0},"htmlText":"Buy la cheap&nbsp;","listText":"Buy la cheap&nbsp;","text":"Buy la cheap","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":3,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9997370468","repostId":1104915715,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"}],"isCommentEnd":false,"newsSizeData":{"likeSize":131,"commentSize":23,"repostSize":0,"favoriteSize":3,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; 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