So I got cute with my TSLA. Approaching the Nov top, I sold a $345 call expecting $275-$300 range. I made a ton of premium on it. But I was early, and could have gotten significantly more premium. But it did come down. the premium didn't. TSLA almost got to $300, but had the look that it needed one more move down. So I sat on the call. Well it never did go back down. So now I'm waiting on target in the low to mid $400's knowing that if it happens before January, I won't be able to sell, and it if does happen on Jan expiration, I lose my shares for significantly less than I should. The basis of my call is $365.
So what do I do? When you get yourself in a situation like this, it's nice to have so many options. Yesterday, on confirmation of breakout, I bought TSLL which is the 2x ETF. While TSLA might go from $365 - $415, TSLL should go from $24 to $33. That's a 37% gain instead of a 14%. I would lose $5k by getting called out. So buying $13k worth of TSLL would get me that $5k. Of course, I have a stop on the TSLL should it fall back below the breakout point. The worst thing that can happen is falling back and expiring above $345 but below $365. But it wouldn't be that bad, as I wouldn't have lost much profit. And should it fail from here and fall way back, well, I keep my shares and premium, get stopped on TSLL, and go forward from there.
Even when your thesis for a stock is playing out perfectly, there's no guarantee it will continue to. Selling calls can be lucrative, but it traps you in time. I am not advising this strategy, just outlining the thought process that went into it. Notice that I have a very defined plan still. I'm not throwing caution to the wind. Especially with a levered ETF.