Wiki Selling TSLA Options - Be the House

[phantasms]

Sold some 900s for next week on this pop. I like to live dangerously.

 

[MikeC]

Ooh, maybe not. I'll be digging deeper into this. Even still, it's a great way to hold TSLA shares.

I have Schwab and I think they would only give me options level 0: covered calls and cash-secured puts. Would love to be wrong if you find out otherwise.

 

[InTheShadows]

I'm thinking something leaked. 805!!!!

 

[bkp_duke]

SO GLAD I didn't write any BCS for this week. Thank you all for that "not advice".

 

[AquaY]

I closed the calls I sold this morning for about 33% profit.
BCS 10/8 -810/+825 BCS 10/8 -805/+830
Darn you @UltradoomY ! You " promised" me 50%. How can I buy my yacht on a measly 33% profit a day??? LOL

Thank you @UltradoomY

 

[juanmedina]

I wonder who's money are we are taking. I am at $26k for the week and I just got the funds from the rental house I sold to do even more trades . I need to stay humble and keep my positions small because one day we will lose.

 

[EV forever]

Something is happening, that's some impressive buying going on right now. Some of my GTC orders just

Wow, am I glad or what to have already opened my BPSs for next week! What is going on, is there any news? Nothing on Twitter or Yahoo

 

[InTheShadows]

I have Schwab and I think they would only give me options level 0: covered calls and cash-secured puts. Would love to be wrong if you find out otherwise.

That is much better than nothing.

 

[mickificki]

Same boat $1.0 same strike exp. Let's hold hands =p

are we still holding hands on our 820 CC's?

 

[Tslynk67]

You could, you know, just let the winning BPS coast into the finish line and be ok with ~$100k for the week.

There's all that day trading you'd miss out on though!

Closing the short and holding the long is all well and good if that then goes ITM, but if the long has a decent value then I think it's best to sell it, otherwise you risk the stock reversing and taking a double loss

 

[Cherry Wine]

As some one who spends more time in the main thread than here, I think i finally figured out a way to be at peace with my positions. After experimenting with a ton of near OTM and ATM puts, I have come to appreciate the versatility of the BPS with its plethora of strikes, spread sizes and expiries. That is one additional dimension (spread size) than what the outright puts give you. Obviously nothing new to the folks here.

My main hang up was with a bullish view where the stock might take off and leave the BPS behind where the capital might have been better deployed in other strategies, especially with all the catalysts on the horizon. So ICs were a strict no for me, especially with the meager call premiums.

What I settled on finally is to pair up my 3-9 DTE BPS with a call calendar on the high side. I am currently in 1000 strike -Jan / +March (2022) that is trading at ~$15 a pop. In case of weakness, I can more easily write BPS for income generation (especially with elevated IV) and if the stock takes off, the calendar spread should too, offsetting some of the drop in downside IV. I'd be gladly looking forward to rolling out my short strike at 1K. While this calendar is negative theta, it is peanuts compared to the theta from BPS, and a ton more capital efficient than owning outright shares. Of course it comes with its own vega / delta exposure, but it is all much smaller than what the BPS will earn you.

I think I can take off some of my outright shares exposure and deploy that into a combination of BPS + call calendars, but I will wait for a few more weeks and observe how this combo performs.

Looking forward to hearing how this goes, and hopefully seeing you in this thread more often going forward!

 

[Cherry Wine]

The key difference to take into account is that there are people who are doing this, have been doing this for a long time and who have made yacht loads of money and quit.
The reason institutions (like Peter Lynch's firm) and others do not is they are diversified, and have a duty to their account holders to make sure one stock or equity cannot tank the fund.

Thus being diversified, they have limited analysts that can research individual stocks and companies - Even ARK and Cathie Wood's firm has their top people researching and knowing all they can about a lot of stocks.

We have a unique ability and liability in that we are only beholden to ourselves (and families) and have a distinct informational advantage.
We can also be 100% in one stock if we want because the only rules are those set by ourselves.

This is something - options and all derivatives - that many a fortune has been won or lost on.
Start small, build up and learn along the way.
There is no other shoe to drop for those reasons. The market rules have not changed, and unless they do, this is the game we get to play if we want.

One other tangent that works is - most - if not the super majority of people do not have the time, patience, starting capital or mental toughness to do this.
It is not easy to go through all the numbers, greeks, strikes, upcoming catalysts, reports, announcements, twitter, forums, etc., etc., etc.... and stay on top of to be successful.
So in short (no pun intended) it is sustainable long term, there is no secret and we can all do it. It does however take a lot of work to be consistent and profitable, and for me that is also very enjoyable.
Cheers!

I agree with this. I was chatting with a good friend of mine recently who I kept in touch with last year when we were both engaging in some options trading. I learned that he's stopped trading because he was losing too much money. This is not for everyone, and those who are successful would do themselves a disservice by thinking it's so easy that anyone could do it. It's not. It takes a lot of time, energy, and the right mentality to make money like this. (And let's be honest - more than a little luck.)

 

[adiggs]

Closing the short and holding the long is all well and good if that then goes ITM, but if the long has a decent value then I think it's best to sell it, otherwise you risk the stock reversing and taking a double loss

This dynamic is why I keep the two positions together. I open the BPS as a single position (made up of two options), and I close the BPS as a single position (again made up of the two contracts). I fiddled around briefly about dysyncing them, closing the short separately from the long, and found that in my situation I ended up putting just as much energy into trying to max out the long position position as I'd put into the short contract, with pennies or dimes on the table vs. dollars.

And then I was also fighting time decay instead of benefitting from it, and managed to turn all that extra energy into a minor additional loss.

So I just stopped - I don't see a path to consistent high returns that will be sustainable over the long haul, that won't always be high energy / effort. (That's my view anyway - which doesn't make me right. I've learned a lot from others about what I had been thinking was right, and then found a better way).

 

[CHGolferJim]

Anybody do any successful Covered Calls only trading this week? I stayed away, and was kind of regretting it until 2:45 pm today, lol.

One day I will have the quiet time to learn about BPS and all the other Halloween candy you guys play with.

 

[adiggs]

I decided to open my BPS for next week and went with 640/700s I collected about 3.35 each, which clears the somewhat ridiculous 5% of spread size bar.

I would prefer to open these on a downward move (sell into strength) but I decided to act on two ideas:
1) The +$4 of the moment might BE weakness, and I feel more strongly in that direction than not (i.e. - shares are going up from here over the next week due to the various news)
2) Even if there might be a better entry tomorrow, there also might not be, and if I'm clearing the 5% threshold then trying for even more doesn't seem like a sound strategy for the long haul. Entries will be better and worse, but 5% for a 700 strike put is like good.

Woot! I'm so smart (lucky)!

An hour or 3 later and that +$4 point in time does indeed look like selling puts into strength. Except it also looks like IV is also spiking as I can sell the same BPS right now (+$17 shares) for the same net credit.

In case anybody is wishing they'd gotten in before the big price spike today, at least these 640/700s for next week haven't changed in value, even as their likelihood of going ITM looks even lower to me.

 

[InTheShadows]

I agree with this. I was chatting with a good friend of mine recently who I kept in touch with last year when we were both engaging in some options trading. I learned that he's stopped trading because he was losing too much money. This is not for everyone, and those who are successful would do themselves a disservice by thinking it's so easy that anyone could do it. It's not. It takes a lot of time, energy, and the right mentality to make money like this. (And let's be honest - more than a little luck.)

I have had multiple people ask me to teach them how to trade. I give them the option alpha link on page one of this thread and tell them to watch all the videos then we can get started. No one has completed that step yet. I figure if they can't invest 6 hours of their time watching the videos, it's not worth my time to try and teach them. And as of late, my time is worth quite a lot.

 

[generalenthu]

Woot! I'm so smart (lucky)!

An hour or 3 later and that +$4 point in time does indeed look like selling puts into strength. Except it also looks like IV is also spiking as I can sell the same BPS right now (+$17 shares) for the same net credit.

In case anybody is wishing they'd gotten in before the big price spike today, at least these 640/700s for next week haven't changed in value, even as their likelihood of going ITM looks even lower to me.

Was about to say that. My 690/600 for next week is unchanged from around noon. Added a tiny bit. Thanks Vega!

 

[Cherry Wine]

Anybody do any successful Covered Calls only trading this week? I stayed away, and was kind of regretting it until 2:45 pm today, lol.

One day I will have the quiet time to learn about BPS and all the other Halloween candy you guys play with.

I sold 30x 10/8 $880s on Monday's pop at open. Closed them yesterday afternoon at a net credit of $0.87 each. It was tempting to sell 10/15 $900s on the pop above $800, but chose to take the flier on what's in store this evening.

 

[InTheShadows]

Woot! I'm so smart (lucky)!

An hour or 3 later and that +$4 point in time does indeed look like selling puts into strength. Except it also looks like IV is also spiking as I can sell the same BPS right now (+$17 shares) for the same net credit.

In case anybody is wishing they'd gotten in before the big price spike today, at least these 640/700s for next week haven't changed in value, even as their likelihood of going ITM looks even lower to me.

yea I was looking at that too. I got concerned when I saw the spike but then I looked and the other ones I opened today had at. most 5% gain. So I was able to open the other two positions I wanted. My short legs are all at 715, narrowest is in a small account with the long at 695. Only $1900 available in that account it let me use the premium received to get the $20 spread. Most are 100 and 55 spreads. I feel really safe at 715 for the short leg.

 

[corduroy]

Sold some 900s for next week on this pop. I like to live dangerously.

I sold some 10/8 $830 covered calls on the pop. Then got nervous and BTC 15 minutes later (luckily) for .10 profit each. I shouldn't day trade.