Hi Said,

I think Ralph has come close to answering your question but perhaps not fully. I will add a little here which hopefully when combined with his answer gives you a more complete picture.

I think the lessons you learned or should have learned with TSLA are that:
(1) An overall short position is riskier than an overall long position.
(2) Adding leverage (which options allow you to do easily) magnifies that risk.

I think where you are a little bit less clear is what constitutes an overall long or short position with options.

These are all overall long positions:
- buy the stock long
- buy a call option
- sell (write) a put option

These are all overall short positions:
- sell the stock short
- buy a put option
- sell (write) a call option

Of all of the above, I only use two of them which are both overall long positions:
- buy the stock long
- sell (write) put options

Jim has written on numerous occasions about put writing. I would recommend that you search for some of his posts on the topic.

StevnFool

Berkshire Hathaway FAQ

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