mershaw2001
I'm short the short sellers
Mario, what were your strikes on your spread (and what was the stock price at when you opened them)?
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Advanced TSLA Options Trading
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No advice, I don't give investment advice here. That said I am simply sitting on a bunch of short put positions myself, waiting for expiration; I have enough margin capacity to carry them indefinitely even if the stock price drops a lot.
If you wait until expiry you will make money unless the stock is below $241 at expiry -- how likely do you think that is?
i noticed that, in passing, this morning too.
usually that disconnect implies a future direction move of the stock. since it was in passing, while looking at my total acct value, not individual positions, i couldn’t tell which contracts seemed mispriced.
i was in a meeting :/
bdy0627
Active Member
Noticed it too. I think it's just a reflection of expectation given that so many have seen this movie before and know what comes next.
bdy0627
Active Member
I think there is huge demand driving it. Those calls are in heavy demand after this crazy drop.
Could it be market makers raising option prices because they don’t want to be on the hook for more calls? That would suggest the big boys have a sense that things are going to be moving up soon.
mershaw2001
I'm short the short sellers
Prices for the near term strikes were very high because the volume was very high. I might be more inclined to think it's a way to cover- push the price down, then buy up all the near term options to protect your short position.
In looking at some chains, it looks like the Oct 19 had huge volume and open interest. 360s were up 25% and 400s were up 37% on a 1% move in TSLA. I did not not see as big a change in Sep 9 or Nov 16 or Jan 2019 options.
I guess we might infer that someone is anticipating a big move up within 2 months? I know I sure am.
Edit: I was speaking about calls above, and I'll add there is no correspondingly large volume or price increase in the puts. Is this call-put parity breaking down to the call side? Implying someone wants to get in but somehow can't buy shares?
Below is the chain I'm looking at, all the action was between 300-430, very little volume above or below that. Note that the last price on the puts is mostly not between the bid-ask because they were so lightly traded, so their percentage change looks better than it is.
I guess we might infer that someone is anticipating a big move up within 2 months? I know I sure am.
Edit: I was speaking about calls above, and I'll add there is no correspondingly large volume or price increase in the puts. Is this call-put parity breaking down to the call side? Implying someone wants to get in but somehow can't buy shares?
Below is the chain I'm looking at, all the action was between 300-430, very little volume above or below that. Note that the last price on the puts is mostly not between the bid-ask because they were so lightly traded, so their percentage change looks better than it is.
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bdy0627
Active Member
This seems very likely to me. Hedging for shorts with the stock driven down so far. Smart ones know the risk they are facing now.
shlokavica22
Member
That's what I was thinking yesterday. Anyone tried slightly Delta positive short stock + long calls?
Mario Kadastik
Active Member
Varying, but majority was 307.5/327.5 spread that I had sold just before Q2 ER and considered quite safe, other bunch was 310/330 that I sold around 350 region after ER. On Thursday TSLA closed around 335 and I was contemplating rolling the 310/330, but was out playing snooker and didn’t anticipate such a move down so assumed if it closes 320-330 range I’d just take the stock. But then Friday came and dropped to 310 region at open so I was screwed right out the door with almost no margin or air that would allow to move them out. Might as well just open new positions, but I had been already opening new ones on the way down...
On Friday before close and today I moved a bunch of spreads around and spent all the remaining margin making sure that I had nothing expiring before mid-late Sept and in the 300-350 range most of it. Had to sell one Nov 390-420 put spread just to move the money from this Friday 320/350 lock to November. If things work out I can move it down again or well this is post Q3 ER so miht naturally be ok too
thouh I anticipate the go private in Q1-Q2 ‘19 so probably need to kove them again...
Looking for some not-an-advices regarding my current option position.
Before The Tweet, my collection of 600 and 700 2020 LEAPs were doing pretty well. Completely by chance, I decided to sell most of them (profitably) an hour or two before The Tweet. I kicked myself as the price shot up until I realized that a $420 ceiling price could actually cause their value to be zero. Then I patted myself on the back. Then I remembered that I still had a good-sized lot of 700 LEAPs that I hadn't sold, so I spent the rest of the day half-kicking and half-patting.
I bought them at an average price of $10.06, and they've been trading around $3 the last few days. I can't decide if I should sell now and cut my losses while they still have value, or gamble that:
Cheers.
Before The Tweet, my collection of 600 and 700 2020 LEAPs were doing pretty well. Completely by chance, I decided to sell most of them (profitably) an hour or two before The Tweet. I kicked myself as the price shot up until I realized that a $420 ceiling price could actually cause their value to be zero. Then I patted myself on the back. Then I remembered that I still had a good-sized lot of 700 LEAPs that I hadn't sold, so I spent the rest of the day half-kicking and half-patting.
I bought them at an average price of $10.06, and they've been trading around $3 the last few days. I can't decide if I should sell now and cut my losses while they still have value, or gamble that:
- Tesla doesn't go private (I can keep them), or the market starts to think it's less likely to go private (their value should increase and I sell at a higher price)
- The mythical short squeeze occurs
- Market conditions change for some other reason that might increase their value (more than the time decay decreases it)
- Something else I haven't thought of yet
- A miracle occurs (see #2)
- LEAP prices should go up in proportion to the odds of the deal not going through.
- They should also go up as the stock price goes up, however...
- If the stock price goes up it's likely a sign that investors believe the deal will go through, which is downward pressure on LEAP prices...
- This is non-trivial to model
Cheers.
The correct answer was "What is 'Do not sell those options!'?"
"Great. I'll take 'Gambling' for $800, Alex."
"Great. I'll take 'Gambling' for $800, Alex."
Johann Koeber
Happy Owner
There are two factors working in opposite direction:
share price is reclining: so they go down
time value is coming back: this will raise the price of these options
Which one is stronger depends a lot on the expiration date. Also the share price will likely recover shortly. The time value would tend to stay high.
I will be buying long call LEAPS OTM as leverage, if the prices are really good.
share price is reclining: so they go down
time value is coming back: this will raise the price of these options
Which one is stronger depends a lot on the expiration date. Also the share price will likely recover shortly. The time value would tend to stay high.
I will be buying long call LEAPS OTM as leverage, if the prices are really good.
Well retrospectively, an advanced option maneuver, although risky, would of been to accumulate long term options, banking on deal not going through with all the time value depleted. today of course, those options immediately came back up for OTM options. I still had a few, but mostly did the exact opposite and sold for major losses.
pz1975
Active Member
Reposting this here from the Market thread as it fits here as well:
Please reconsider the best timing for rolling forward LEAPs. The best time is when the stock price is high. Your message states that you would roll them forward on a pullback, but it would be better if you try to roll them forward when you think the SP is at a maximum.
To illustrate by example:
J19 $250 LEAPs are currently worth $75 and J20 $250 LEAPs are currently worth $100. So when the stock is low like now, you would be able to roll forward 10 J19 $250 LEAPs for 7.5 J20 $250 LEAPs (75/100 x 10). (I am using J20 for my example because J21's are not available of course but it serves the same purpose for illustration).
J19 $250 LEAPs were worth $130 a few weeks ago when the SP was at its recent high. At that time, J20 $250 LEAPs were worth $145. So if you rolled forward then, you would have been able to roll 10 J19 $250 LEAPs into 9 J20 $250 LEAPs (130/145 x 10).
Thus, you would have had an extra 1.5 J20 $250 LEAPs by rolling forward at a high vs. a low SP. Please consider this when executing your plan.
Please reconsider the best timing for rolling forward LEAPs. The best time is when the stock price is high. Your message states that you would roll them forward on a pullback, but it would be better if you try to roll them forward when you think the SP is at a maximum.
To illustrate by example:
J19 $250 LEAPs are currently worth $75 and J20 $250 LEAPs are currently worth $100. So when the stock is low like now, you would be able to roll forward 10 J19 $250 LEAPs for 7.5 J20 $250 LEAPs (75/100 x 10). (I am using J20 for my example because J21's are not available of course but it serves the same purpose for illustration).
J19 $250 LEAPs were worth $130 a few weeks ago when the SP was at its recent high. At that time, J20 $250 LEAPs were worth $145. So if you rolled forward then, you would have been able to roll 10 J19 $250 LEAPs into 9 J20 $250 LEAPs (130/145 x 10).
Thus, you would have had an extra 1.5 J20 $250 LEAPs by rolling forward at a high vs. a low SP. Please consider this when executing your plan.
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