I agree with what kelvin said. The IV for Tesla is above average now and a crash may increase the option premium. Making it riskier for you to hold on to those call options.

Alternatively, you may want to consider selling some puts after a crash and when IV is high. Then use those premiums collected to fund your share purchase

Depends on your risk tolerance and portfolio. I think selling margin secured puts are the way to go.

I have a decent sized portfolio that allows me to buy shares with margin if I do get assigned. Having cash to secure the put may be an inefficient use of your capital - better to look for higher ROI. I personally don’t use margin unless I have high conviction on the returns (ie after a major crash or to secure a put or call I’m selling that is unlikely to be assigned).

Margin is really good even if you don’t use it. It’s basically your emergency fund.

If you sell long term puts, the premium can be juicy. I think one contract for Tesla that expires in 2024 at a certain strike was around USD20,000 for 100 shares. That’s having RM80k in your pocket straight. Downside is you’re locking your margin or cash to secure this out for a really long time. You’re being paid for taking future risk. Though, you can always close this contract when the option price drops and you make a small profit out of it.

You may want to consider being in the Vega gang, if the goal is to sell options when IV is high and close the position when IV crushes.

I personally prefer selling puts that expire around 1 year. Choose a strike that is way in the money plus a few other conditions.

Another style is for the Theta gang. Basically sell options that expire around 30 - 60 days so that time decay eats up the option premium

This post has been edited by Dealus: Dec 7 2021, 05:40 PM