Wow did this turn out to be wrong. Was able to close these out at a 80% profit. Can't believe it fell after that beat.I wrote 700-strike covered calls against my shares yesterday when it was trading at around 650. The premium was so not worth it at this point with that beat...
I think it could have a multi day run, especially if other earnings are good. Does anyone have any advice on how best to manage this? Do I take the L and let my shares get called away at the end of the week and miss out on the potential upside, or take the L and buy back the covered calls at a L?
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Wiki Selling TSLA Options - Be the House
- Thread starter adiggs
- Start date
Bunch of early call closes for me as well. I saw the 80-90% gain first thing this morning and didn't think about it any more than that. There was better close options later in the day but it also could have turned around and not been such a no-brainer early close. In one day - uhm yes.
And I think there's a pretty good opportunity to sell the same option tomorrow for another high premium.
I also early closed the short side of several spreads for 80-90% gains while keeping the nearly worthless long sides open. If we get a decent sized move in either direction I might see a >100% return on those long sides (.02 to .05 kind of stuff
). But heck - they're practically worthless and no longer consume any margin, so I'm giving it a whirl.I'm not surprised at the drop - I wouldn't have been surprised with a jump either, but the usual post-earnings action is down. I also expect more ups than downs over the next couple of weeks while word gets out and investors digest the earnings. This and $5 is worth a cup of coffee
I sure did like the IV crush today - that was awesome. I want to do that again next week! Too bad I have to wait another quarter. Cleared 2 or 3 weeks of income overnight - gotta love that.
llirk
Member
A quick post as a shout out to the origin of this thread... STO CSP645 last Thursday for $6.50, was assigned shares over the weekend and immediately wrote C665 on Monday pre earnings for $20. Closed today for $4 and now waiting for cooler heads to prevail tomorrow to rewrite.
Owning TSLA shares is the retirement plan but writing options is the additional income to enjoy the finer things in life!
Owning TSLA shares is the retirement plan but writing options is the additional income to enjoy the finer things in life!
If it opens green out of the gate are people generally rewriting today, and closer to to the money, or waiting until later in the day/tomorrow?
Thinking about closing 0730C710 this AM hoping SP and premiums will spurt in time to write for 0806, maybe write half this week and half on Monday. (Edit: Closed at ~10:00 ET capturing 95% of 7/23 sto.)
FYI, as one data point within the debate about sitting out covered calls during these weeks before and after ER, my trades netted $16.12/share 7/12-28, leaving the underlying HODL shares untouched:
- 7/12 sto $14.48 0730C730
- 7/23 btc ($2.58)
- 7/23 sto $4.42 0730C710
- 7/28 btc ($0.20)
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For anyone else with IBKR have you noticed a major change in margin today? I opened my accounts before trading commenced to find a moderately healthy positive maintenance margin balance was now very negative. I rolled what I could at open but they liquidated the C+ side of some Jan21 call spreads to get the margin positive again (just).
The overnight change in my account margin shouldn't have been so dramatic. This indicates to me that IBKR may have changed their house margin requirements for TSLA overnight and this has massively affected the margin balance of my accounts. The most annoying part is there's no bulletin or announcement that its coming and no ability to plan for it. Seems like someone's very keen to shake out some shares from retail.
The overnight change in my account margin shouldn't have been so dramatic. This indicates to me that IBKR may have changed their house margin requirements for TSLA overnight and this has massively affected the margin balance of my accounts. The most annoying part is there's no bulletin or announcement that its coming and no ability to plan for it. Seems like someone's very keen to shake out some shares from retail.
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for me, yes
trick is to open them 1-2 weeks out (ie, i have 8/13 +p600/-p620 $4.21 credit)
it's more than my $3 minimum income per position, so it's good enough
You open then when we were in the red? I see about $3.40 nowoops just noticed it was 8/13 not 8/6.
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Stretch2727
Engineer and Car Nut
I am not going to roll my weekly covered calls and cash secured puts this week. I am just going to let them expire. The premiums have collapsed after earnings. Made a lot of money selling these last Thursday before earnings. I thought for sure some would assign based on the earnings but they are all out of the money.
I will try to sell new again on Monday, as I think the MM are keeping the stock held tight until they can better position themselves.
Low volatility = low premiums.
I will try to sell new again on Monday, as I think the MM are keeping the stock held tight until they can better position themselves.
Low volatility = low premiums.
corduroy
Active Member
My main account is TDA, not IBKR, but I woke up this morning to my first ever margin/maintenance call. Too many open -Ps and BPS I guess. I need to pay more attention to all the different margin balances.
Low volatility = low premiums = low risk
After being as all-in as I can get on Monday I am largely back out The IV crush plus the share price moves since then turned a lot of positions into 80%+ winners very quickly. I'm mostly left with some BPS for next week that are only 40% ahead or so. I do have some freed up capital though, and am thinking about 8/13 BPS but nothing yet.
My "I dare you CC" need to be reopened at some point, but I haven't yet. If we see a big pop tomorrow then maybe then. I'm likely to open before end of this week, for next week, regardless so that I get the time decay over the weekend in my favor.
The 460/660 BPS that replaced the 760p are doing great. They're still ITM and aren't tracking to being finished for good this week, but they've already paid back nearly 1/2 of what it would have cost me to close the old position. They probably roll tomorrow whatever happens - I might just keep this aggressive BPS on, even if/when I find them OTM again -- they're doing that well.
I like having some aggressive "I dare you" positions to go along with more conservative positions. I still believe that I had a good idea back at the beginning of the year (which I got from @Lycanthrope ) that high premium positions are their own form of risk management / mitigation, as the high premiums provide resources to handle the bad moves. The mistakes I made back in Feb:
1) in the face of the big move, I didn't roll NEARLY as aggressively as I should have (or that I would now).
2) I wasn't as ready as I thought to take assignment. I've found a cure for this on the call side at least (use pmcc instead of cc).
3) Spreads as a management tool
It's only taken me 1/2 of the year to finally get those lessons learned. No tears from me though; still making $ while learning, even if some of that learning came from large individual trade losses.
The IV crush plus the share price moves since then turned a lot of positions into 80%+ winners very quickly. I'm mostly left with some BPS for next week that are only 40% ahead or so. I do have some freed up capital though, and am thinking about 8/13 BPS but nothing yet.My "I dare you CC" need to be reopened at some point, but I haven't yet. If we see a big pop tomorrow then maybe then. I'm likely to open before end of this week, for next week, regardless so that I get the time decay over the weekend in my favor.
The 460/660 BPS that replaced the 760p are doing great. They're still ITM and aren't tracking to being finished for good this week, but they've already paid back nearly 1/2 of what it would have cost me to close the old position. They probably roll tomorrow whatever happens - I might just keep this aggressive BPS on, even if/when I find them OTM again -- they're doing that well.
I like having some aggressive "I dare you" positions to go along with more conservative positions. I still believe that I had a good idea back at the beginning of the year (which I got from @Lycanthrope ) that high premium positions are their own form of risk management / mitigation, as the high premiums provide resources to handle the bad moves. The mistakes I made back in Feb:
1) in the face of the big move, I didn't roll NEARLY as aggressively as I should have (or that I would now).
2) I wasn't as ready as I thought to take assignment. I've found a cure for this on the call side at least (use pmcc instead of cc).
3) Spreads as a management tool
It's only taken me 1/2 of the year to finally get those lessons learned. No tears from me though; still making $ while learning, even if some of that learning came from large individual trade losses.
I crushed my hopes for a breakout & rolled my 680/610 Bull-Put to a 650/620 BP to get the last 10k of Theta.
And tomorrow on the morning-dip i roll the 620 puts down to 610 again to hopefully make a few bucks along the way on the swings. I rolled them up 610 -> 620 for 0.45, want to roll them down 620->610 for 0.75. If that triggers the next order is 610 -> 620 again for 0.25. Rinse, repeat. Hopefully i can do this some times until friday..
A day like today with just swinging between 640/650 is perfect for that
And tomorrow on the morning-dip i roll the 620 puts down to 610 again to hopefully make a few bucks along the way on the swings. I rolled them up 610 -> 620 for 0.45, want to roll them down 620->610 for 0.75. If that triggers the next order is 610 -> 620 again for 0.25. Rinse, repeat. Hopefully i can do this some times until friday..
A day like today with just swinging between 640/650 is perfect for that
Would I be nuts to sell $660 covered calls tomorrow for Friday? How much do I really believe in MaxPain?
Well this didn't age well, maybe tomorrow we will test $700. Posts like this one drive me crazy. Let's not kid ourselves; no one knows what the stock is going to do. Pick strikes that make sense to you according to your analysis and methodology and be happy. Trading earnings can be very profitable but like everything else it comes with a risk.
Not if you’re ready to let go of those shares.Would I be nuts to sell $660 covered calls tomorrow for Friday? How much do I really believe in MaxPain?
otherwise, yes
Make sure you are well payed for them. I'm thinking of doing something similarly aggressive but I'd also be planning to roll them when the share price goes up and puts me ITM. That's how these things work for meWould I be nuts to sell $660 covered calls tomorrow for Friday? How much do I really believe in MaxPain?
i did something similar as a test to see my guts, and it seems to be working $$$. Because it's daring, i didn't use my own shares for the CCWould I be nuts to sell $660 covered calls tomorrow for Friday? How much do I really believe in MaxPain?
7/23 bought 100 shares @643 using margin
7/23 STO 7/30 CCx1 -c645, credit $2025
7/26 rolled to 8/6, credit $430
7/28 rolled to 8/13, credit $612
i will keep rolling and let it get assigned eventually... $3k credit for garbage shares that i'm not attached to.
what i learned:
1) if the close is 645+, my max loss is just paper loss; no account damage; i lost the shares that were not mine anyway
2) if the close is <645, keep rolling for credits; or just keep rolling forever at every Monday peak
3) i don't know what this strategy is called, but it looks like the 2nd half of the Wheel
4) this is fun but i won't be doing this play again becoz for the same $64k margin, i can get $10k credit (BPS 8/6 37x 600/620) instead of $3k... for now, let the Wheel finish
Ok Team Wheel, I’m looking for some advice….. what to do with a bunch of 7/30 -p650s? Sold those for $29-$30, a very nice price, about 10d ago. Now, MaxPain suggests that they will be ITM at close. So, simple answer, just buy them back for $2-$5 Friday, and resell again for 8/06. Easy peasy right? Well, not so fast.
With the latest amazing earnings, various Q3&Q4 projections topping $1000/sh, and the Austin/Berlin production ramping in 2022, would it be foolish to continue selling puts? Assuming 22 wk remain in 2021 and $10/wk profit selling ATM puts, that’s only $650+220=$870. That $10/wk is generous, assuming that I trade perfectly. Currently 650s are only adding about $5/wk beyond two weeks out. If the SP really reaches $1000 by EOY, then I’m falling off the wheel.
So, my inclination is to let the puts assign and take the shares (cost basis is $620 or so). This is in my ROTH IRA, which is currently underweight calls/puts at 1:3 (instead of my preferred 3:1 ratio). Allowing the puts to expire ITM gets my account to 100% shares.
Yesterday, in my regular IRA before really thinking thing through, I just rolled some to 8/06 -p640s for $2 credit. That account is much closer to my optimum 3:1 callut ratio, so I’m feeling better about it. Still, I’m having second thoughts and may need to convert some put into shares so that the ratio is 4:1. Decisions…… FYI, everything is cash-secured, so a simple buyback yields enough cash to buy shares outright.
Now, MaxPain suggests that they will be ITM at close. So, simple answer, just buy them back for $2-$5 Friday, and resell again for 8/06. Easy peasy right? Well, not so fast.With the latest amazing earnings, various Q3&Q4 projections topping $1000/sh, and the Austin/Berlin production ramping in 2022, would it be foolish to continue selling puts? Assuming 22 wk remain in 2021 and $10/wk profit selling ATM puts, that’s only $650+220=$870. That $10/wk is generous, assuming that I trade perfectly. Currently 650s are only adding about $5/wk beyond two weeks out. If the SP really reaches $1000 by EOY, then I’m falling off the wheel.
So, my inclination is to let the puts assign and take the shares (cost basis is $620 or so). This is in my ROTH IRA, which is currently underweight calls/puts at 1:3 (instead of my preferred 3:1 ratio). Allowing the puts to expire ITM gets my account to 100% shares.
Yesterday, in my regular IRA before really thinking thing through, I just rolled some to 8/06 -p640s for $2 credit. That account is much closer to my optimum 3:1 call
ut ratio, so I’m feeling better about it. Still, I’m having second thoughts and may need to convert some put into shares so that the ratio is 4:1. Decisions…… FYI, everything is cash-secured, so a simple buyback yields enough cash to buy shares outright.Similar threads
