$特斯拉(TSLA)$ ‌Selling put options to buy Tesla + Q&A exchange

1. Sell put Tesla options

Strike price $140

The due date is 2023.08.18

Sell ​​2 contracts, the option price is 9.5 US dollars, and the option premium is 1900 US dollars.

The exercise price and time are selected according to your own wishes. For example, if you plan to buy Tesla at a price of 120 yuan, you can choose an exercise price of 120 yuan, but the lower the price, the higher the option premium will be. few.

At the same time, I chose a longer period of time, so the option premium is more, because I am worried that Tesla will rebound, and I can earn 9.5 yuan in option premium, which is not bad. However, the time is too long and the uncertainty is great.

For example, if it falls to nearly 100 as before, you will lose a lot, so it must be suitable to buy Tesla at a price of 140. In fact, the option premium is 9.5 yuan, and the actual cost is about 130 US dollars.

Second, if the market closes on 08.18

If Tesla's stock price is higher than 140, the option will not be exercised and the option premium will be $1,900.

But in this way, Tesla’s rise will be missed. For example, before Tesla fell sharply, the put option was not exercised, and Tesla rose quickly, so Tesla’s rise was missed, and only a loss was made. Lost premium. In fact, there is no best of both worlds. ️

3. If the market closes on 08.18

Tesla's stock price is lower than 140 yuan, and I have to buy 200 shares of Tesla's stock at a price of 140 US dollars (one contract corresponds to 100 shares). Of course, even though the option was exercised, the option premium of 1,900 US dollars was still earned. However, if the option is exercised at 140 yuan, you need to bear the loss of stock price fluctuations.

4. If the option is exercised, the funds required

The funds required for the exercise of an option contract are: 140X100=14,000 US dollars Selling 2 puts, the exercise requires 28,000 US dollars ️

Five, caution

The account needs to have enough funds, and it needs to have 28,000 cash (not stocks) to be suitable. At the same time, it is suitable to sell put options on the premise that it is planned to buy Tesla at a price of 140. In fact, the option premium is about 9.5 yuan, then The actual cost is about 130 yuan.

Six, choose the reason

First of all, we are optimistic about the prospects of Tesla. Although the results are announced and the gross profit margin is reduced, the current focus is still on sales. At the same time, the electric pickup Cybertruck and "full self-driving" (FSD) will follow. With the profit margin falling, the later stage of automatic driving is expected. Improve profit margins.

At the same time, the stock price has fluctuated too much recently. If you buy the underlying stock directly, you are worried that you will be caught if you rush in, so you use the put option to operate. If it falls to 140 yuan, you can buy it. If it does not fall, you will earn 9.5 yuan option premium. Then continue to re-open positions and sell puts.

Seven, ️ risk warning

Remember about options, if you don’t understand, don’t touch it. If you are also optimistic about Tesla, wait for it to fall and buy the stock directly. It is not necessary to go through options. If you want to operate through options, please contact me by phone or WeChat to communicate with me first, and understand clearly first, otherwise options may lead to liquidation, and you don’t know what’s going on.

8. Q&A

Question: I sold 13 Tesla PUTs for 155 yuan on April 28 yesterday. Do I have to buy them back at 155 yuan on April 28?

Answer: You don’t need to buy it back. After the expiration date, no matter whether you exercise the option or not, you will earn all the option premium. It's just that if the option is exercised, you need to buy the stock at the exercise price of 155 yuan.

Q: If I don't have enough cash, will I be liquidated?

Answer: If there is not enough cash and Tesla falls sharply, it may be liquidated.

Q: Are all stocks in my account liquidated?

Answer: How much bearish Tesla is, if Tesla falls a lot, it will, and if Tesla does not fall, it will not. For example, if you sell put 13 contracts, it corresponds to 1300 shares, and the exercise price is 155 yuan, and the exercise cost is about 200,000 US dollars.

For example, on April 28, if Tesla falls to 125 due to extreme market conditions, it will lose $30 per share, and if it has 1,300 shares, it will lose $39,000. If the account margin is insufficient, some option contracts will be closed. If there is a sharp drop in extreme circumstances and the options are liquidated, and the margin is still insufficient, other positions will be liquidated.

Q: Do you wait until the due date and the account funds are insufficient to liquidate your position?

Answer: The position will not be closed until it expires. If it falls sharply now, or at any time, the account will be liquidated due to insufficient margin in the account.

Q: I have another question, that is, as long as the underlying stock falls below my strike price, do I need a corresponding margin?

Answer: No. As the stock price rises and falls, the margin will also fluctuate accordingly. Because selling put is a long position, if Tesla falls more, the more margin will be required at the same time.

Question: I should have asked you first before opening a position. Answer: Actually, playing like this is very risky. Even if you don’t lose your position this time, if you play this way, in the long run, you will definitely lose your position once. Part of the position can be closed at a later date. The exercise of 13 rights requires 200,000 US dollars, which is based on the funds in the capital account, so I always remind everyone that they must be able to calculate math problems well. How much money is in the account, and how many option contracts are sold corresponding to the put.

Q: If I sell puts and then buy them all back to close the position, is there still an option premium?

Answer: There is no expiration, and the position is closed in the middle. It is the same as stocks, and the difference is only made by buying and selling. Because the position has been closed and there is no position, there is no option premium.

Q: If I buy a put, as an option buyer, will there be liquidation?

Answer: An option buyer, no matter if he buys a put or a call, there is no risk of liquidation. To be a buyer is to pay the option premium, and the most is to lose all the option premium paid for the purchase. However, as an option buyer, you are actually buying large and small options, so it is not recommended to touch them. Only when options are used as a tool is a stable investment.

For example: ️

1. If you want to buy a stock, you can sell it through put (the premise must be to buy the stock) ️

2. If you want to sell the stock, you can sell the call (the premise must be to hold the stock) ️

3. Know how to calculate math problems (otherwise you will be liquidated) A US stock option contract exercise corresponds to 100 shares of stock

4. Don't buy call alone, but buy put. Personally, I think these are extremely speculative.