11 September, 2022 seen 1,533Deribit is my latest discovery from the crazy crypto world. It all started with simple buy-and-hold operations back in…
It was on early November 5th, 2019 morning, I was reading an interesting story about a guy buying a Tesla car for his sons 9th birthday, here is the story in brief:
What is #TSLA4Tesla project? I am not into cars. My son, Arian, 8 years old, is different. He loves cars. Sometimes back, he got in love with Tesla. He asked me to buy a Tesla. I didn't need a new car. However, seeing Arian's craze for Tesla, and my love for trading stocks, we made a deal to trade TSLA stocks to see if we can buy a real Tesla.
Here it the blog: #TSLA4Tesla project
Now, I'm not into cars neither, though TSLA stock has been on my radar for a while, I even have sold some Iron Condors on in the past.
I decided to start a new project - with the goal to own 100 shares of TSLA stock.
To get there I will use options trading strategies only*.
Vertical spreads (calls and puts, and iron condors). The ultimate goal after having 100 shares of TSLA stock is not to buy a new TESLA car but to sell covered calls on TSLA stock (the easiest and less riskiest options strategy)
As on November 5th, 2019 I TSLA share is traded at $317,47. To have 100 shares it would require about $31,740 in the capital.
To start my journey towards 100 shares of TSLA stock by selling only options I started with following call bear spread:
BOT 335/337 NOV 15'19 CALL @ $0.51
If this option expires worthless I keep $51. If we could manage to collect $51 every 10 days after a year we could potentially collect $1,861.5. For that money, we could buy ~ 6 shares of TSLA.
Now in total, it would ask ~ 16 years to get there (for the simplicity of this article I'm not taking into consideration losing trades or commissions).
That doesn't sound impressive, but on the other hand, having almost free $2,000 a year sounds quite good. So why not?
Let's see will it ask me 16 years to acquire 100 shares of TSLA by selling options on it or hopefully I could get there in 2-3 years?
*Depending on results after the first year I might use additional funds to get there sooner but for right now only options trading on TSLA stock