How to sell a covered call on TSLA
Retail's favorite vol product. IV in the 50s–70s is normal, the skew flips around sentiment, and the chain is liquid enough to trade four-legged structures at size. Anyone selling naked premium here should size like the stock can move 15% in a week, because it can.
A covered call on TSLA is 100 shares plus one short call. With TSLA at $311.21 with 46% ATM implied vol on the Aug 28 expiry, selling the $335 call 27 days out pays $748 per contract against $31,121 of capital per contract — 2.4% over the period, 32% annualized if you could repeat it forever (you can't; more on that below).
The trade, priced from the chain
27d to August 28, 2026| Leg | Qty | Price | Δ | IV | Cash |
|---|---|---|---|---|---|
| Buy100 TSLA shares | 100 | $311.21 | — | — | −$31,121 |
| SellAug 28 $335 call | 1 | $7.48 | 0.30 | 48% | +$748 |
Every leg above is priced at the chain’s own quote — the identical number the builder will show you when you click through (last traded price), captured August 1, 2026 with a 15-minute delay. Only strikes whose print survives an implied-volatility check (within 20% of its own IV) and a no-arbitrage check across the ladder are priced here. Full methodology. Greeks, breakevens, max profit/loss and probability of profit are computed by OptionTracker’s engine at r = 4.2%. Educational analysis, not investment advice.
Yield on the capital this actually ties up
Annualized figures assume the same trade repeats every 27 days at the same premium. Nothing does. Use them to compare strikes and tickers, not to forecast a year.
How a covered call works
The position is two pieces: long 100 TSLA shares and short one call. The short call obliges you to deliver those shares at $335 if the buyer exercises, and you keep the $748 premium no matter what happens. That's the whole trade — you sold the right tail of your own position.
At August 28, 2026 expiry there are three outcomes. Below $335 the call expires worthless and you keep both the shares and the premium. Above it the shares get called away at $335, for a total return of 10.0% from $311.21 including the premium. Exactly at the strike, you keep everything and a coin flip decides assignment.
Your breakeven on the combined position sits at $303.73 — spot minus the premium collected. That is the only downside protection a covered call gives you: 2.4% of cushion. It is not a hedge.
When it makes sense
- Your view is flat to mildly higher — enough drift to keep the shares, not enough to blow through the strike.
- Implied vol is at or above where TSLA has actually been realizing. At 46% at-the-money implied vol, TSLA is the 6th richest of the 20 underlyings on this site. A premium seller wants to be near the top of that list, not the bottom.
- You have no near-term catalyst you want full exposure to — quarterly deliveries, earnings, and whatever the CEO said last night is where the cap hurts most.
- The position survives the worst single session in this underlying's recent history at the size you are about to put on.
Where the risk actually is
The risk in a covered call is not the call. It is the 100 shares. Max loss on the structure is $30,373 if TSLA goes to zero, versus $31,121 if you held the shares naked — the premium is the entire difference. Anyone describing this as a "low risk" trade is describing the option leg and ignoring the equity.
The other cost is opportunity. Above $335 your P/L is flat at $3,127 while the stock keeps going. On a name that gaps — quarterly deliveries, earnings, and whatever the CEO said last night — that ceiling gets tested more often than the annualized-yield table suggests.
Early assignment is an operational risk rather than a market one: it arrives on a weekend, converts a defined structure into a stock position, and requires cash you may have allocated elsewhere.
Reading the TSLA chain
The credits look like a different asset class, and they are compensation, not edge. Tesla's realized vol has spent long stretches at or above its implied, which is the definition of a name where premium selling has no structural tailwind. Defined risk is not optional here: a naked short strangle on TSLA has produced account-ending weeks more than once.
TSLA's Aug 28 strikes are $5 apart near the money (1.61% of spot). Coarse enough that the strike you want frequently does not exist, and the nearest rung is a different trade. 56k contracts of open interest on Aug 28 is workable around the money and thin in the wings — width costs more here than the ladder suggests. 36 strikes on that expiry — 49% of the board — carry prints that agree with their own implied volatility and hold up across the ladder, and those are the strikes priced here. Retail-deep at every strike and every weekly. Four-leg fills near mid are routine, even in the wings.
Skew is inverted: the 25-delta CALL implies 4.2% more vol than the put. That is the market pricing upside risk above downside risk — a squeeze, a takeover rumour, or a crowded short. Selling calls into an inverted skew pays better than usual and is riskier than usual for exactly the same reason. The term structure is flat inside 1.5% between the two captured expiries, so there is no calendar edge to harvest and no event visibly priced into one month over the other.
At 46% ATM implied vol, the Aug 28 options are pricing a one-standard-deviation move of $39.20 over 27 days — roughly −12.6% to +12.6%, or $272.01 to $350.41. Everything the covered call above collects is rent on that range. If TSLA routinely covers 12.6% in 27 days, the credit is fair compensation rather than edge.
The specific way people lose money on TSLA: Treating a 60% IV as 'rich'. On this name that is the middle of the range, and the wings price fairly for a reason.
Picking the strike on TSLA
Strike selection is the whole trade. Delta is the shorthand: a short call's delta is roughly the market's odds of finishing in the money, so a 0.30-delta call is a ~30% chance of getting called away. Here is how the bands behave on TSLA at $311.21:
| Band | What it means | When it fits |
|---|---|---|
| 0.15 – 0.20 Δ | Far OTM, ~15–20% assignment odds | You want the shares more than the income. Thin premium, rarely called away.On TSLA: the Aug 28 $355 call at $3.65, 16% annualized |
| 0.25 – 0.35 Δ | The standard band | Best premium-per-unit-of-regret. Most systematic covered-call programs live here.On TSLA: the Aug 28 $335 call at $7.48, 32% annualized |
| 0.40 – 0.50 Δ | Near the money, coin-flip assignment | You are half-exiting the position and want to be paid for it. Caps upside hard.On TSLA: the Aug 28 $320 call at $12.32, 54% annualized |
| > 0.60 Δ | ITM, you're mostly selling the shares | A disguised exit order. If that's the plan, compare it to just selling the stock.On TSLA: the Aug 28 $315 call at $14.55, 63% annualized |
The table below is the live Aug 28 call chain around the money on TSLA — real deltas, real mids, real open interest from the capture. Annualized assumes you repeat the same sale every 27 days, which nobody actually achieves; treat it as a comparison unit, not a forecast.
The premium varies 4.0× across the nine strikes below. Everything the delta table is trying to tell you is visible in that gradient. Open interest concentrates at $350 on this expiry, which is usually where the fills are cleanest.
| Strike | vs spot | Mid | Δ | IV | % of spot | Ann. | OI |
|---|---|---|---|---|---|---|---|
| $315 | +1.2% | $14.55 | 0.48 | 49% | 4.7% | 63% | 938 |
| $320 | +2.8% | $12.32 | 0.43 | 48% | 4.0% | 54% | 1.1k |
| $325 | +4.4% | $10.40 | 0.38 | 49% | 3.3% | 45% | 912 |
| $330 | +6.0% | $8.93 | 0.34 | 48% | 2.9% | 39% | 1.5k |
| $335used | +7.6% | $7.48 | 0.30 | 48% | 2.4% | 32% | 901 |
| $340 | +9.3% | $6.36 | 0.26 | 49% | 2.0% | 28% | 1.7k |
| $345 | +10.9% | $5.23 | 0.23 | 48% | 1.7% | 23% | 680 |
| $350 | +12.5% | $4.30 | 0.20 | 48% | 1.4% | 19% | 2.9k |
| $355 | +14.1% | $3.65 | 0.17 | 49% | 1.2% | 16% | 1.2k |
TSLA calls expiring August 28, 2026· 15-min delayed capture · “Ann.” annualizes the mid as a percentage of spot over 27 days.
Managing the position
- Close early when most of the premium is gone. Buying the call back at 20–25% of the credit with two weeks left beats the headline 32% annualized rate, because it frees the shares to be written again instead of pinning them for the last few cents.
- Decide the assignment question before you sell, not after. If TSLA closes above $335, you sold at your price. That is the deal you signed.
- Book the loss in the same units you booked the credit. A trade that collected $120 and closed for $340 lost $220; describing it as 'a roll' does not change the cash.
- Do not add to a tested position to lower the average. Averaging into short premium works right up until the one time it does not, and that time is the one that matters.
Common mistakes
Selling calls on shares you're not willing to lose
If getting called away at $335 would make you chase TSLA back, you were never neutral. Write against a lot you'd happily sell, or don't write.
Chasing the annualized number
Weeklies annualize beautifully and pay you to sit on top of every quarterly deliveries move. Higher annualized yield on a shorter tenor is compensation for gamma risk, not free money.
Sizing against buying power
Margin requirement is what the broker will let you do, not what you should do. The relevant limit is the loss you can absorb without changing the plan.
TSLA covered call FAQ
How much does a covered call on TSLA pay right now?
The Aug 28 $335 call last marked around $7.48 per share, so $748 for one contract against 100 shares worth $31,121. That is 2.4% over 27 days, or 32% annualized. Prices are 15-minute delayed and captured on this page's build date — open the builder for a live quote.
Do I need 100 shares to sell a covered call on TSLA?
Yes — one contract covers exactly 100 shares, which is $31,121 at today's price. With fewer shares the call is naked, with materially different margin and risk. A long-dated deep-ITM call can stand in for the stock (a poor man's covered call), but that is a different trade with different risks.
How much is TSLA expected to move by Aug 28?
The Aug 28 options imply a one-standard-deviation move of $39.20 — about 12.6% of the TSLA share price — over the 27 days to expiry. That is the market's estimate, not a forecast: roughly a third of the time the actual move is larger.
Is TSLA option skew favouring puts or calls?
Calls. The 25-delta call implies 4.2% more volatility than the 25-delta put on the Aug 28 chain — an inverted skew, usually a sign of squeeze or event risk to the upside.
Build it yourself
Everything above is one construction at one moment. Open it in the builder to drag strikes along the ladder, scrub the expiry, and watch max profit, breakevens and probability of profit recompute live against the real TSLA chain — free, no account.
Related reading
- Covered calls on shares you already ownThe covered-call math you find online divides premium by cost basis. If you bought the stock years ago, that number is a fantasy — and it will talk you into selling a strike you should never have touched.
- The wheel strategy, with real numbersEveryone can recite the four steps. Almost nobody can tell you what a completed cycle returned on the capital it tied up. Here is one, priced off a real chain and folded by the same engine that runs our tracker.
- Strike selection with delta and IV"Sell the 30 delta" is the most repeated rule in retail options and nobody can tell you what it means. Here is what delta actually measures, where it stops matching probability, and how far off it gets on a high-IV name.
Other TSLA strategies
- TSLA cash-secured putGet paid to place a limit order below the market.
- TSLA iron condorSell a range, buy the wings, collect if the stock stays put.
- TSLA bull call spreadBuy a call, sell a higher one — cheaper upside with a ceiling.
- TSLA bull put spreadSell a put spread below the market: credit now, defined risk.
- TSLA long straddleBuy the call and the put — pay for a move in either direction.
- TSLA long strangleOTM call plus OTM put — cheaper than a straddle, needs more move.
- TSLA long callDefined-risk upside with a deadline attached.
- TSLA long putDefined-risk downside, or insurance with an expiry date.
- TSLA calendar call spreadSell the near-dated call, buy the far one — rent time twice.
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