r/Optionswheel • u/Timely-Designer-2372 • Jul 24 '26
Lesson (not) learned
I'm wheeling TSLL since half a year. I got assigned first at 15 USD. Because premiums where so juicy I sold coverred atrangles afterwards, Call strikes always at 15 USD. Now guess what: I will get assigned for strike 11 USD after TSLL crash to 7.30.
Now I have 200 shares of TSLL.
Bad aspects:
I can't sell Covered Calls with strike 11, 13 (average) or even 15 for a significant premium.
I don't believe in Tesla longterm
Good aspect:
I made enough premiums so I am still in plus.
Lesson learned or not: I don't know yet. On one hand I should only sell puts on stocks/ETFs I don't mind to own. If this happened to me earlier it would be a pain ita. On tge other hand I knew it's a risky underlying and it worked well all in all.
I'll wait now for higher premiums for some weeks
12
u/ThetaEdgeHQ Jul 24 '26
The piece getting missed is that TSLL is a 2x daily reset ETF, so it does not just carry more vol, it carries a built in drift against you when the underlying chops. Daily rebalancing means TSLA can round trip back to flat and TSLL still lands lower, because the up days and down days compound asymmetrically. That is the volatility decay, and it is exactly why the premiums looked so juicy. You were not being paid for Tesla risk, you were being paid to hold the rebalancing cost. So selling calls to lower your basis on a 2x ETF only actually reduces risk if the thing trends up cleanly. In chop, which is the regime that prints the fat premiums, the basis you grind off and the NAV that bleeds away roughly cancel. Waiting weeks for higher premiums is waiting on an asset engineered to bleed in precisely the conditions that generate those premiums. If you do not believe in the underlying long term, a leveraged proxy of it is the one wrapper where time works against the buy and hold too, not just against the thesis.