Wiki Selling TSLA Options - Be the House

[Yoona]

Does anyone know how this probability number is calculated?

I'm working on a script in my spreadsheet to evaluate different spread sizes vs a value to spend to let me know what is the best roi vs probability.

I'll put it in a new google sheet and share it with all of you once I have it finished. along with instructions on how to get set up. You will need a TD Ameritrade developers account to use it. I don't think you have to have an account with them to create a developers account.

omg i am literally also on the same website just now... POP is:

thinking of 9/3 iron butterfly x5 +p670/-p735/-c735/+c800, POP is 100%, credit $2800

 

[FS_FRA]

Does anyone know how this probability number is calculated?

I'm working on a script in my spreadsheet to evaluate different spread sizes vs a value to spend to let me know what is the best roi vs probability.

I'll put it in a new google sheet and share it with all of you once I have it finished. along with instructions on how to get set up. You will need a TD Ameritrade developers account to use it. I don't think you have to have an account with them to create a developers account.

Beyond clicking on the ? and getting this:

I have no idea.

 

[CHGolferJim]

I, on the other hand, don't mind weekend theta, assuming that I can roll away a bad week (which I've had to do). So I wanted to share some of my thoughts for the coming weeks that I plan to put trades on for today and get some feedback.

9/10 expiration already has nearly 300k OI and a max pain of 725. I'm going to look to sell puts at 725 and 715, expecting support from max pain at 725 and technicals at 715. I'm guessing we see resistance around 750-765, but I'll just wait until Monday and see.

9/17 I'm guessing will be a down week, but I'm just not sure how. FSD 10 should be released to the beta testers over that weekend, and if Elon is correct, the news should be very positive. We often don't see the catalysts that really move the stock coming (S&P inclusion hit about 2 weeks earlier than I would have ever thought possible, for instance), but MMs have a lot of incentive to push us down. Since that's quad witching, just an overall down market dragging us down is possible. I've got calls sold at 765 @ $9 for this week.

10/1 expiration looks like a very good chance to be a breakout week, but I'll sell puts for 10/8. FSD Beta button might come out 9/24, which means the wider public gets to experience it over that weekend. Presumably this is bullish. Also, anticipation of a blow out Q3 delivery number, which should be coming out early the following week, should push the SP higher. So I'm looking to sell some ITM BPS for that following week, probably around 765 short strike, meaning I expect us to top 765 by expiration at 10/8.

For all of these trades more than 1 week out, I'm using maybe 10% of my firepower total, so not massive positions. I still do most of my trading week to week, but I like to have positions on that are a month or so out to take advantage of unexpected moves in the SP and gather theta.

Overall, I think that the market isn't pricing in immanent TSLA success on FSD, and if it becomes clear from FSD 10 and the beta button that Tesla actually is the leader here by a wide margin (which I think they are), the stock may go 2019-2020 style nuts on us. At the very least if the math on FSD take rate goes from ~20% to ~70% on a "good enough" FSD, with a lot of existing Tesla owners hopping on, that should blow earnings estimates out of the water to a degree that is scary.

Great post, thanks. Have limit orders in for the same 0917 STO, probably won't hit until Tuesday.

 

[InTheShadows]

Beyond clicking on the ? and getting this: View attachment 704661 I have no idea.

I'm wondering how they calculate it? Like a formula to use. I'm wondering if it's some kind of calculation done off of delta. I know it's not exact but I usually use delta in my head to say -20 delta means 80% of the time this will expire OTM.

Here is what I am working on and this is the last column I need to calculate. B1:B6 are variables that when changed go out and fetch the latest (20 min delay) data to populate the spreadsheet. B5 isn't used yet.

 

[Chenkers]

Today's IC:
- puts closed
- calls waiting for 0.15

View attachment 704655

I'll just be letting mine expire worthless at this rate. The chance of a $20+ move either way within 90 minutes after hours is remote. Call me tight fisted but I'd rather not pay the several hundred $ in commissions it would take to close them all out.

 

[pz1975]

My broker (iTrade) only gives me a maximum $1 million of margin for all of my TSLA shares and LEAPS. It is a rule based on a “concentrated portfolio” haha. So even if I had $100 million of TSLA (I don’t), I’d still somehow only have $1 million in margin. This is annoying. Anyone know if, for example, IB has this restriction as well? He said if I diversified into other companies I would get more margin. I didn’t even dignify that with a response.

I could be way more aggressive with my options selling if I could unlock more margin.

 

[Chenkers]

My broker (iTrade) only gives me a maximum $1 million of margin for all of my TSLA shares and LEAPS. It is a rule based on a “concentrated portfolio” haha. So even if I had $100 million of TSLA (I don’t), I’d still somehow only have $1 million in margin. This is annoying. Anyone know if, for example, IB has this restriction as well? He said if I diversified into other companies I would get more margin. I didn’t even dignify that with a response.

I could be way more aggressive with my options selling if I could unlock more margin.

I have a margin account with IB in Australia but here they only provide up to a maximum of $25kAU ($18.5kUSD) in non-wholesale margin accounts. However, if I say have Puts exercised then they will use whatever excess liquidity I have in the account towards the Put purchases. I've had this happen and had a -$160k margin balance in my account that was being charged interest. At this point I had no buying power and could only do trades that would reduce maintenance margin until the negative balance was less than -$25kAU.

So it's worth checking out if you have access to all of your excess liquidity to back option trades (as I have), even if the amount of margin they will provide is capped at $1M.

 

[ZenMan]

My broker (iTrade) only gives me a maximum $1 million of margin for all of my TSLA shares and LEAPS. It is a rule based on a “concentrated portfolio” haha. So even if I had $100 million of TSLA (I don’t), I’d still somehow only have $1 million in margin. This is annoying. Anyone know if, for example, IB has this restriction as well? He said if I diversified into other companies I would get more margin. I didn’t even dignify that with a response.

I could be way more aggressive with my options selling if I could unlock more margin.

IB does not have this restriction. I am 100% TSLA and have several millions in margin available. It is a set percentage of your TSLA stock value.

I could send you a referral if you are interested.

 

[UltradoomY]

Looking to set up an IC for the triple witching week of 09/17

-$660P / +$655P
-$775C / +$780C
$0.98 per contract....
Tempting since the margin is quite low since the spread is tight.
Thoughts?
I am looking for Tesla to stay range bound next week and the week of 09/17 and looking to capture a "safe" spread on both sides.
I picked the puts at $660 since that is where max pain is currently listed and the calls since it is $75 away from a wall of 45k calls at $700 and almost 28k contracts split between $740 and $750

 

[Drezil]

Looking to set up an IC for the triple witching week of 09/17

-$660P / +$655P
-$775C / +$780C
$0.98 per contract....
Tempting since the margin is quite low since the spread is tight.
Thoughts?
I am looking for Tesla to stay range bound next week and the week of 09/17 and looking to capture a "safe" spread on both sides.
I picked the puts at $660 since that is where max pain is currently listed and the calls since it is $75 away from a wall of 45k calls at $700 and almost 28k contracts split between $740 and $750

I would open the BPS now and the call side on Tuesday or so when we climb a lot.

 

[Cherry Wine]

IB does not have this restriction. I am 100% TSLA and have several millions in margin available. It is a set percentage of your TSLA stock value.

I could send you a referral if you are interested.

IBKR actually has a margin calculator here if you want to get an idea of what would be available to you. FWIW, using the more sophisticated and exact portfolio margin calculator available to me when logged in, I get more margin on Reg T than portfolio margin since I'm 100% TSLA and portfolio margin dings you for concentrated investments.

(This post is aimed @pz1975 btw)

 

[Yoona]

I would open the BPS now and the call side on Tuesday or so when we climb a lot.

agree; i am waiting for my BPS +p600/-p680 to be filled

 

[ReddyLeaf]

I just wanted to again thank everyone here for your “not advice” over the past few months. This week was again nicely profitable and relaxing for me, and again in an unconventional way. Just like last week, I managed to sell CCs too early on Monday and at too low a strike (727.50s/730s at $6.20+/-). Rather than stress when they went 2x (against me), on Tuesday I rolled up/out for a small $1+/- credit (9/10 735/740s at $11-12). Then, when the SP was still rising on Wednesday, I rolled out/up again for another $1-2 credit (9/17 740/745s at $16+/-). Each time rather than stress about being wrong, I trusted the rolling advice from the masters and waited. Yes, I was a bit nervous about moving out so far in time that I would lose the theta decay benefit. This AM when I leisurely checked the SP (because I was “out” this week and wouldn’t need to worry until 9/17), I couldn’t believe the lows, so jumped on the brokerage accounts, set some buybacks for ~$11.80, and voila, they hit on a downward drop. So, effectively, got $6-$7 premium this week after all, about 2-3x my goal. No, I’m not making 10%, $25K, or enough to buy an island, buy it’s enough to live on and the best part was reducing the stress. No share purchases this week (my accounts are still recovering from two weeks ago). Live to trade another day!

Same here. Rolled everything to next week for a small credit. If we get a pull back after China numbers I will close out and wait it out. I knew that I shouldn’t sell calls this week because of a likely $50-$70 SP rise, even closed my GTC orders on Sunday night. Then, got courage (stupidity?) on Monday. Oops. Oh well, kicking the can down the road.

 

[Chenkers]

IBKR actually has a margin calculator here if you want to get an idea of what would be available to you. FWIW, using the more sophisticated and exact portfolio margin calculator available to me when logged in, I get more margin on Reg T than portfolio margin since I'm 100% TSLA and portfolio margin dings you for concentrated investments.

(This post is aimed @pz1975 btw)

The IBKR margin calculator gives me a result of 50% margin for TSLA. However I believe this is just the published margin rate and doesn't include the additional 'house' margin that IBKR applies to certain stocks such as TSLA. When I calculate the actual maintenance margin in my account (all TSLA and TSLA options) I get a 67% margin rate on TSLA shares. I'm not sure if it's the same for IBKR in the US and other countries.

 

[mickificki]

Does anyone here find themselves quietly rooting for their weekly option "win" while overall losing $ on tsla?

 

[Yoona]

Does anyone here find themselves quietly rooting for their weekly option "win" while overall losing $ on tsla?

half-half

50% of portfolio is on income-generating mode; this secretly wants tsla to freeze so i don't go ITM

the other 50% is CC OTM (gravy) to slowly collect shares; this secretly wants tsla to grow

separate accounts to reduce confusion

 

[dl003]

half-half

50% of portfolio is on income-generating mode; this secretly wants tsla to freeze so i don't go ITM

the other 50% is CC OTM (gravy) to slowly collect shares; this secretly wants tsla to grow

separate accounts to reduce confusion

yeah right...
Basically everyone here weekdays

 

[Puff]

Does anyone here find themselves quietly rooting for their weekly option "win" while overall losing $ on tsla?

Absolutely! STO 9/3 740C last week. What a relief

 

[AquaY]

Does anyone here find themselves quietly rooting for their weekly option "win" while overall losing $ on tsla?

Absolutely. I only own 900 shares and besides my regular option trading have tried to buy 100 more by first selling 1 close to ATM put when the SP was in the high 600s. I think I did this like every week for awhile and all I got for my trouble was cash.
Then I sold ATM puts. Then I sold a put that was ITM and Still, the stock screwed me! LOL
Now it's higher than I want to buy that extra 100 but I figure I will some day get one of my larger positions put to me and I'll keep 100 shares at that time

 

[pz1975]

Does anyone here find themselves quietly rooting for their weekly option "win" while overall losing $ on tsla?

The way I look at it is my account used to only go up when TSLA went up. Now it goes up when TSLA is flat or goes up. So 2/3 possible scenarios I am happy with now. Plus I enjoy the math puzzle/strategy aspects of options selling.