Advanced TSLA Options Trading

[MikeC]

I closed my position of 1 short PUT of 120 OCT 18 for a small profit of $20 and opened 2 short PUTs of 125 OCT 18 at @$1.9View attachment 322136

I think those are pretty safe in that they won’t be exercised but with such a small transaction your fees are eating more than 30% of your premium.

 

[Revhappy2]

I think those are pretty safe in that they won’t be exercised but with such a small transaction your fees are eating more than 30% of your premium.

Thanks. Regarding your comment on the fees, no, I trade using interactive brokers, they have really wafer thin fees. $0.79 for the entire contract and the premium is $2 X 100. So it is 0.395%

 

[Revhappy2]

I have placed these 4 orders before market open. Do you guys think they will get traded?

 

[neroden]

I haven't been following options pricing for those strikes.

I will warn you that market makers reprice the options in the morning just before market opening, so I almost never make options limit orders overnight -- either they don't execute or they execute because the price has moved massively and I could have gotten a better deal.

 

[Revhappy2]

I haven't been following options pricing for those strikes.

I will warn you that market makers reprice the options in the morning just before market opening, so I almost never make options limit orders overnight -- either they don't execute or they execute because the price has moved massively and I could have gotten a better deal.

2 of those orders got executed at open and you were right, I could have got a better if I waited for couple of mins and placed the order, but I haven't subscribed for market data, so I am running blind. At one point the 155 PUT position was down $50, but now seems to have recovered.

 

[Revhappy2]

I closed my positions and realized a profit of S$650. I am done with Telsa for now. Thanks everyone for your help and support. I enjoyed this space over the last 2 days.

 

[durkie]

2 of those orders got executed at open and you were right, I could have got a better if I waited for couple of mins and placed the order, but I haven't subscribed for market data, so I am running blind. At one point the 155 PUT position was down $50, but now seems to have recovered.

Here's a vote for buy the data -- you're making decisions with consequences in the thousands and potentially tens of thousands of dollars range, and option volumes (even for TSLA) are low enough that out-of-date bid/ask spreads can go stale very quickly. There are enough free "real-time" stock tickers out there that you can probably skip the stock data, but the option data is valuable.

 

[PaulusdB]

Here's a vote for buy the data -- you're making decisions with consequences in the thousands and potentially tens of thousands of dollars range, and option volumes (even for TSLA) are low enough that out-of-date bid/ask spreads can go stale very quickly. There are enough free "real-time" stock tickers out there that you can probably skip the stock data, but the option data is valuable.

My Dutch broker charges me € 1.50 / month for real time US options data. No reason not to have that info.
(All Euronext info is free/included.)

 

[Marsnaut]

Not particularly advanced but has anyone wrote covered calls on margined shares using IB? I already write covered calls but would like to increase my passive income.

With margin rates relatively low, slightly offset through the Stock Yield Enhancement Program (enabling shares to be shorted), it effectively mirrors a naked call with less risk.

 

[durkie]

Not particularly advanced but has anyone wrote covered calls on margined shares using IB? I already write covered calls but would like to increase my passive income.

With margin rates relatively low, slightly offset through the Stock Yield Enhancement Program (enabling shares to be shorted), it effectively mirrors a naked call with less risk.

Yep -- I do this occasionally on IB. Write some naked puts, occasionally get assigned shares (that I pay for on margin), write some calls against the shares, occasionally get called, rinse, repeat.

As I've said before, the hardest part about this is the mental aspect: when I'm assigned shares via puts, it's not usually too crazy of a price difference and I'm happy owning more shares (and i'm not pushing it on my margin limits). When those shares are called though, things are often on an upswing and it's much more mentally difficult to part with the shares and leave money on the table (or you end up faffing about with rolling things forward)

 

[Revhappy2]

Even though I sold my 150 & 155 puts a bit too early, when SP was up 10%, the SP closed 16% up, I see the option premiums havent fallen at all.

I am going to punt one more time today, again punching in a price before open. Actually the price I punched yesterday was the highest price, the only reason p/l shshow red for a few minutes in the beginning is because of the bid/ask spread. So my conclusion is punching in orders before market opens is a good thing.

 

[pz1975]

It is unwise to put in an order to sell a put before market opens, and especially when the spread is as broad as the 2 options you posted above. You may up selling the put for a much lower amount than you could have (if there is a gap up at open). You would be much better off waiting for the market to open, find a put with a narrower bid/ask spread and then sell the put starting near the middle of the spread and working down. There tends to be a higher volatility (and thus higher option premium) right after opening so it is a decent time to sell a short-medium term option.

 

[Revhappy2]

Today's trade.

 

[oneday]

I am about as amateur option trader as it gets but I figured I’d ask here since it’s somewhat active thread.

So, I closed all of my August calls today, except for my Aug 10 307.5. My question relating to these options has to do with the amount I can sell over the current sp. essentially all day it only traded $1 over the spot price during the day. I put a sell order in the morning at $50 that never executed. The bid ask was only around a $1 above the spot price. When SP was 354 the option was trading at 47.5.

Is there a term for this, like time value or some Greek word?

The Aug 31, options I sold at over $50 over the spot price.

Nonetheless, what is a good option here when your options are getting close (within 1 week) to expire Are really DITM. I’ve just been holding them and selling on the day they expire hoping for a small to modest move to the upside.

Hope this makes any sense. I have had a couple glasses of wine.

Congrats again to all the option holders this week.

 

[ggr]

I am about as amateur option trader as it gets but I figured I’d ask here since it’s somewhat active thread.

So, I closed all of my August calls today, except for my Aug 10 307.5. My question relating to these options has to do with the amount I can sell over the current sp. essentially all day it only traded $1 over the spot price during the day. I put a sell order in the morning at $50 that never executed. The bid ask was only around a $1 above the spot price. When SP was 354 the option was trading at 47.5.

Is there a term for this, like time value or some Greek word?

The Aug 31, options I sold at over $50 over the spot price.

Nonetheless, what is a good option here when your options are getting close (within 1 week) to expire Are really DITM. I’ve just been holding them and selling on the day they expire hoping for a small to modest move to the upside.

Hope this makes any sense. I have had a couple glasses of wine.

Congrats again to all the option holders this week.

Yes, it's the time value of the options. Basically, the longer they have to run, the more chance that the stock price will reach that level, and so the higher the value of the option. (Yes, there's a greek letter for this. It's all greek to me.)

The time you should or shouldn't hold them is entirely subjective. The perfect market theory says that it shouldn't matter on average. I tend, myself, to hold options too long. These are well into the money, and I think (again, myself) that there will be analyst upgrades next week and a good possibility that they will be worth more, a lot more than the decaying time value. I'd hold onto them. (As I am with my own Aug 10 $307.5's, purchased at $16.75 some time ago. Having said that, I sold exactly half of them yesterday, at $33.50, in a pre-programmed trade.)

 

[oneday]

Yes, it's the time value of the options. Basically, the longer they have to run, the more chance that the stock price will reach that level, and so the higher the value of the option. (Yes, there's a greek letter for this. It's all greek to me.)

The time you should or shouldn't hold them is entirely subjective. The perfect market theory says that it shouldn't matter on average. I tend, myself, to hold options too long. These are well into the money, and I think (again, myself) that there will be analyst upgrades next week and a good possibility that they will be worth more, a lot more than the decaying time value. I'd hold onto them. (As I am with my own Aug 10 $307.5's, purchased at $16.75 some time ago. Having said that, I sold exactly half of them yesterday, at $33.50, in a pre-programmed trade.)

This exactly answered my question. Thank you!

 

[Menifeer]

... I'd hold onto them. (As I am with my own Aug 10 $307.5's, purchased at $16.75 some time ago. Having said that, I sold exactly half of them yesterday, at $33.50, in a pre-programmed trade.)

Scratching my head...

Those $307.50s should have been worth more than $33.50 on a day when the stock traded in the high $340s-low $350s. (maybe you meant a gain of $33.50)

 

[ggr]

Scratching my head...

Those $307.50s should have been worth more than $33.50 on a day when the stock traded in the high $340s-low $350s. (maybe you meant a gain of $33.50)

When I buy short term options, I immediately enter an order to sell half of them at twice the price, good for 60 days. I've often been stuck in meetings or traveling or whatever and missed a quick pop, only to have them all expire worthless or worth less a day or two later. Sure, if I'd been able to watch the screen all day I might have cancelled that order and made more money a couple of hours later. But I'm sleeping easy.

 

[oneday]

Obviously the deeper in the money the call is the less value over the spot SP you get. So my next question is, I’m holding a few different Dec19 calls 300, 320, and 335 strikes. As they become deeper in the money they essentially become less valuable, mainly just mimicking the share price. Is this even the right way to look at this? Here is their current prices 300’s - $70.35, 320’s - $57.23, and 335’s - $48.75. So essentially the 335’s are worth $35 more than the current share price and the 300s are worth $20 more. I think I might want to execute a couple of the 300’s come December but the other ones it seems like it would be better to sell and buy some less in the money options.

 

[pz1975]

Obviously the deeper in the money the call is the less value over the spot SP you get. So my next question is, I’m holding a few different Dec19 calls 300, 320, and 335 strikes. As they become deeper in the money they essentially become less valuable, mainly just mimicking the share price. Is this even the right way to look at this? Here is their current prices 300’s - $70.35, 320’s - $57.23, and 335’s - $48.75. So essentially the 335’s are worth $35 more than the current share price and the 300s are worth $20 more. I think I might want to execute a couple of the 300’s come December but the other ones it seems like it would be better to sell and buy some less in the money options.

I find that once the option becomes deep in the money, if you think there is further upside, it is better to sell and roll It out (+/- including the profit you have made) to a (much) further out expiration date and a strike price near the money.