Friends, small short sellers have surrendered and rolled their positions. Expect a pullback or halt in gains starting today.
Institutions are closing 390-420 calls expiring this week and rolling to next week's 440-500 calls:
Buy $TSLA 20241220 440.0 CALL$
Sell $TSLA 20241220 500.0 CALL$
Today is ideal for selling calls, but naked calls on Tesla are very risky without holding shares. I'll use a spread strategy, choosing the same strike price as institutions but expiring this week:
Sell $TSLA 20241213 440.0 CALL$ , Buy $TSLA 20241213 480.0 CALL$
Tuesday's pullback was a false alarm. Due to Monday's surge in put option positions, NVIDIA experienced a reverse short squeeze, forcing those who sold 137 and 138 puts to cut losses and run.
As shown, Tuesday's put option position reduction data: December 13 expiry 138 puts decreased by 34.6K contracts, 137 puts by 13.6K contracts. Additionally, 139 puts decreased by 8,483 contracts, 140 puts by 7,039 contracts. The reduction in put options by strike price order clearly reduces downward pressure on the stock.
Moreover, this week's put options below 136 strike weren't actively opened. Tuesday's overall option opening data shows most top-ranked puts expire next week or the week after, indicating shorts aren't planning to add to this week's decline.
The put target price generally aims at the 130 level, with no apparent intention to suppress the stock price.
On the call side, at-the-money sell calls remain active, with institutions staying consistent, continuing to sell 142 calls and buying 152 calls for hedging.
In conclusion, although NVIDIA's trend looks precarious, shorts didn't take advantage of Tuesday's opportunity for further pressure.
I'm worried watching the data daily - when will you big players start shorting so I can buy the dip?
A pullback to 120 would be ideal, but 130 might be the limit.
Superstitiously speaking, the next two weeks are prime for pullbacks. I previously suggested a January pullback, but would Musk allow a market crash during the presidential inauguration month? Certainly not. Given his love for holidays, Christmas and New Year weeks might also stay stable, leaving only FOMC week around December 20 for market volatility.
If next week brings a pullback, positioning should start now, but NVIDIA's signals aren't clear. Institutions might fear retail buyers accumulating shares, hence only small dips to shake out positions.
No rush, let's keep watching. Today I'll sell a put $NVDA 20251213 135.0 PUT$ .
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