I would day trade them.... should have sold today at the peak on open and buy back in the dip with some ATM calls... not sure if that's the best strategy but that's what I would do. I'm basing that strategy, and my selling 270 calls, on the assumption we are sideways and range-bound between 250 and 255.
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I would day trade them.... should have sold today at the peak on open and buy back in the dip with some ATM calls... not sure if that's the best strategy but that's what I would do. I'm basing that strategy, and my selling 270 calls, on the assumption we are sideways and range-bound between 250 and 255.
MitchJi
Trying to learn kindness, patience & forgiveness
You might want to roll them to March 3's or February 24's if you think that the Q4 ER will be a catalyst.
MitchJi
Trying to learn kindness, patience & forgiveness
There are restrictions on buying and selling options on the same day that he might want to avoid.
I was jokingly referring to our analysis of this over the last few days and the fact you're against it haha.
A late Feb ER date, could bode well for these kind of questions. Hell, we would only be 20 or so weeks from potential M3 production by then!
Hmm... was not aware of those... I'm using a margin / "pattern day trader" account, maybe that is why it doesn't seem to cause any problems for me?
racer26
Active Member
My holdings are entirely in a Canadian Tax-Free Savings Account. I've certainly bought and sold the same option on the same day before, with no issue as far as I know.
TFSA's are a tax-sheltered account which works like this:
You pay tax on the money when you made it (its not like most other retirement savings accounts in which contributions are deducted from your income when calculating income tax in the year you earned it)
You have a cap to how much you can deposit in such an account (around $5,000 per year since it was started about 10 years ago)
All gains made in such an account are tax-free.
You can take money out of this account any time without penalty, as long as you wait 1 year before re-depositing it.
It makes a really attractive vehicle for high-risk, high-reward investments because of the gains being tax-free.
Been thinking a lot about how much I should position myself for Q4 and Q1 ER related price swings.
The strategy was to accumulate Mar and Jun calls at opportune times... that I did, 4 Mar contracts and 9 for Jun. I'm thinking I'll stick to the strategy and not buy more unless there are nice little dips.
Anyone going for a straddle or other long/short combo around Q4 ER? I personally don't see the stock price tanking after ER, but sideways won't surprise me.
phigment
Member
But try to do that twice in a 3-day period and I think you'd run in to problems.
The sale of the first can be used to buy additional shares. But if you try to sell those newly purchased shares before they settle you'd then be "free riding". That's against the rules.
Also, I don't think TFSA/RRSP accounts can have margin, so that wouldn't allow you to get away with it.
But if you're not selling/buying 100% of your holdings then it might be fine. Basically you can't sell any shares that haven't settled yet. So if you 100 shares, one day, but still have an extra 100 in your account then those can still be sold to make room for other purchase.
Some of the most robust covering in the recent weeks - 416k shares covered so far, but others (fools) are rushing in - 109k shares got shorted. I hope it will get even more interesting...
racer26
Active Member
I believe your understanding of freeriding is mostly correct, except that Options settle in one day instead of 3, and so, at the rate I'm trading, its mostly a non-issue.
I also believe you're correct about TFSA/RRSP not being able to have margin.
Ran into an incident a couple months ago with my bank's systems where it allowed me to buy a spread position, and they called me the next day saying I couldn't do that and they needed to reverse it. Apparently they don't allow me to cover a write with a longer-dated/lower-striked call, but rather, I can only do covered writes against actual common stock in my account. In the end, they cancelled the write as though it never happened, turning a trade that should've made ~20% into one that made 100%.
Vgrin...am I right in thinking that this is one of the few instances of more aggressive net covering? (In the range of multiple 100s of thousands of shares). If yes, I find that encouraging of some "strong shorts" exiting and being replaced by week shorts that could be steamrolled fairly easily.
racer26
Active Member
I don't think that could be attributed to short covering @vgrinshpun
Would suggest about 1/3 of today's volume so far is short covering, and there was no significant action in SP between 11:02am and 11:10am where you show the big cover.
I was sitting on the sidelines the last 2 weeks, but I am back in with shares and leaps. I think this pattern now wants to break upwards, not down. Really a technical read at this point.
There was only one day with more presumed covering during this run-up - on 12/29/2016 my snap shots caught 397,820 shares that were covered. There were two more days with less covering, but in 300k range: 1/13/2017 - 332,570 shares and 1/18 with 324,965 shares.
There is certain ambiguity in this data, but I do believe that this is covering. Couple of thing to keep in mind:
- for obvious reasons shares borrowed for shorting show up on the Fidelity trading screen live, while covered shares not necessarily so, especially when current Fidelity screen shows plenty of shares to borrow
- TSLA is moving up today against market headwinds and its own pattern of the last 8 trading days on a relatively low volume - covering would explain this
Quite possible... be interesting to see what happens when we approach 255, that maybe pretty strong resistance.
Let's see if we test 255 tomorrow, or go into a pattern of alternating up and down days.
Yep! I may have been overly pessimistic about the upside potential this week....
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