Part 7/11:
Selling Puts: By selling near-the-money or slightly out-of-the-money puts (e.g., at a $405 strike), investors collect premiums, betting that Tesla will stay above that level. If it does, they keep the premium and can repeat the process weekly.
Selling Calls: Selling covered calls at higher strikes (e.g., $465) allows collecting premiums when expecting sideways movement or slight upward drift. This is a conservative approach that caps upside but boosts income.
Counterintuitive Positioning: When believing the stock will stay within the $410–$460 channel, traders might sell puts near the bottom and calls near the top, effectively trading within this neutral range.