Wiki Selling TSLA Options - Be the House

[Yoona]

By the way, how often do all these strategies make it to the finish line? The 3rd condor is the one that would scare me if I were to attempt it.... that is unless you plan to hold it for a week or two.

#3 has a BTC limit order at 25% profit.
It's a test of the tastytrade video :

Wiki - Selling TSLA Options - Be the House

Very interesting video. Basically, look for 45 DTE with nice IV (ie better than 50% of the 52-week range so anything 42%+ is ok): Then, open IC with short=15 delta and long=4 strikes away. Close the position at 25% of credit since there is less advantage of holding it through expiration...

teslamotorsclub.com

 

[PastorDave]

I normally have 1-4 ICs open and this is my way of spreading the risk/margin so that one mistake does not blow up my account and ruin months of work.

View attachment 706955

#2 is a weekly IC, normally opened on Wed/Thu once I am "sure" of the Friday closing. STO the sides separately on dip/peak. I think of a weekly IC as a "top-up" that gives me back the commissions/fees I spent that week. If the Friday closing is super obvious or if my margin room is above my "mental reserve", I tend to open more contracts. BTC on Friday is a must. If the Friday closing is sketchy/unpredictable, or if the credit is too small compared to margin room it is risking, there's no weekly IC.

The remaining ICs (#1,#3) are non-weekly and opened 1-3 weeks early. This allows me to get bigger credits. I look for fast dip on Thu/Fri and STO the BPS. STO the BCS on Monday rise. BTC at 90-95% and then look for the next deal. I am now thinking 80% is probably good enough and move on. This kind of IC may have less overall credit than doing weeklies, but i like the idea of less babysitting, putting unused margin to work, and most of all: spreading out the risk into multiple/smaller contracts on different DTE.

Although i'm careful, I'm not too scared of high IVs near catalysts. Ever since i learned of the flip-roll and split-flip exit strategies (discussed upthread) thanks to the excellent experts here, I've gained high confidence in knowing how to fix problem spreads.

Not advice from rookie!

Thanks so much for the great response @Yoona! I think expanding my horizons to 2 weeks out expiration instead of focusing on the following week will help. Also, I didn't ask it, but I had the question in the back of my mind if you were opening each side separately. I guess there's plenty of time to do that when you're opening more than one side at a time more than a week out as well. Very helpful.

I'll have to search for the split-flip strategy, but I agree, I feel much more confident now that I've rolled and "fixed" some bad moves a few times. Thanks for sharing your trades!

 

[InTheShadows]

#3 has a BTC limit order at 25% profit.
It's a test of the tastytrade video :

Wiki - Selling TSLA Options - Be the House

Very interesting video. Basically, look for 45 DTE with nice IV (ie better than 50% of the 52-week range so anything 42%+ is ok): Then, open IC with short=15 delta and long=4 strikes away. Close the position at 25% of credit since there is less advantage of holding it through expiration...

teslamotorsclub.com

Nice. The biggest thing I don’t agree with in that video is the 45 DTE. My max is 10 days. Even with 10 days we can see a lot of movement with TSLA. Besides, with these shorter time frames you are maximizing theta decay. I have watched videos of people doing IC’s on SPY mid week exp. they say every expiration date is a payday.

IMO volatility has a lot to do with my tolerance for number of DTE’s. If we were talking SPY, DIS, AAPL, I think 45 would be the sweet spot. AMC, GME on the other hand 3 days.

 

[Yoona]

Nice. The biggest thing I don’t agree with in that video is the 45 DTE. My max is 10 days. Even with 10 days we can see a lot of movement with TSLA. Besides, with these shorter time frames you are maximizing theta decay. I have watched videos of people doing IC’s on SPY mid week exp. they say every expiration date is a payday.

IMO volatility has a lot to do with my tolerance for number of DTE’s. If we were talking SPY, DIS, AAPL, I think 45 would be the sweet spot. AMC, GME on the other hand 3 days.

I agree, so i did only 24 DTE. If the test works, I am thinking 10-15 DTE onwards.

 

[AquaY]

I agree, so i did only 24 DTE. If the test works, I am thinking 10-15 DTE onwards.

Let us know what you think after your test

 

[InTheShadows]

Let us know what you think after your test

The hard part about these small case test we run is it doesn’t give us info on when things go bad.

I have considered testing some of our concepts with very small positions with some of the meme stocks to see how the mechanics works.

 

[juanmedina]

Are 770s in play? I still have 8 of them.

 

[Drezil]

looking at the max-pain-chart i would say that they prefer to have 750, but will do with 760 if needed.

Open Interest @750, 760 and 770 is about equal. P/C for 750 is only 0.25, that why i think some of them already hedged, some don't.

But it will depend on the macros as they seem to be too weak to push it down against rising macros.

 

[Chenkers]

Are 770s in play? I still have 8 of them.

The balance point between the Put and Call open interest is currently around $740. Not advice, however if it plays out like most recent weeks then they'll be defending $760 today and early tomorrow. Then once the volume goes down they'll try push it down to their target somewhere between $740 and $750. There's also likely to be a bit of buying pressure very late on Friday that will push it back up a bit but MM would still like to defend the $750 call wall with a fall back to the $760.

You can see they're currently expending a lot of effort defending $760. They should be able to maintain this unless there's a lot of prolonged volume.

 

[UltradoomY]

Still have my IC sold last week for 09/17 expiration
-$650 / +$630 P
-$785 / +$805 C
Holding tight but now looking for my next IC for the following week expiration.
Eyeing the
-$720 / +$695 P
-$815 / +$840
For $5.22 each
Gives plenty of room and time for it to burn.
Just an fyi..

 

[AquaY]

Off Topic but related and I'd like to ask it here instead of making a new thread.
If anyone here feels this is a distraction just say so and i will make a thread.
This is mostly a question for Americans because that's where I live.

What broker do you use and like?
How good are their trading systems ? Especially for options and tracking positions. What fees are charged and what's their margin loan rate if you know?
I use Etrade. They have a good over all platform; Etrade Pro which I do like for my main positions.
You can add and subtract what you want to see, how it's arranged, sort and resort etc like I'm sure many other platforms do.

I use Power Etrade for doing my Options scenarios and it's pretty good but lacks some useful tools and could be easier to enter complex strategies.
For example to enter an Iron Condor I have to enter all the information except the underlying of each leg myself. It's annoying when you want to run several different ICs

To see margin impact you have to use their regular website instead of having it on the screen you are using. It does show what your buying power after the trade will be but in order to see what it's impact is you have to note what your buying power is before entering a scenario.

I have an IRA at a mutual fund company and another account at Charles Schwab and am thinking of moving them to another broker with better systems than Etrade so I can trade options in them.
I was thinking of Ameritrade but would love to hear feedback from people actually using it.

One of the great things for me with Etrade is my margin account. Because Etrade bought out Brown & Co years ago where I had my account originally, they have to honor my Brown rate agreements. My margin rate today is 3.09%
Obviously this is for loan margin not options margin.

 

[UltradoomY]

Off Topic but related and I'd like to ask it here instead of making a new thread.
If anyone here feels this is a distraction just say so and i will make a thread.
This is mostly a question for Americans because that's where I live.

What broker do you use and like?
How good are their trading systems ? Especially for options and tracking positions. What fees are charged and what's their margin loan rate if you know?
I use Etrade. They have a good over all platform; Etrade Pro which I do like for my main positions.
You can add and subtract what you want to see, how it's arranged, sort and resort etc like I'm sure many other platforms do.

I use Power Etrade for doing my Options scenarios and it's pretty good but lacks some useful tools and could be easier to enter complex strategies.
For example to enter an Iron Condor I have to enter all the information except the underlying of each leg myself. It's annoying when you want to run several different ICs

To see margin impact you have to use their regular website instead of having it on the screen you are using. It does show what your buying power after the trade will be but in order to see what it's impact is you have to note what your buying power is before entering a scenario.

I have an IRA at a mutual fund company and another account at Charles Schwab and am thinking of moving them to another broker with better systems than Etrade so I can trade options in them.
I was thinking of Ameritrade but would love to hear feedback from people actually using it.

One of the great things for me with Etrade is my margin account. Because Etrade bought out Brown & Co years ago where I had my account originally, they have to honor my Brown rate agreements. My margin rate today is 3.09%
Obviously this is for loan margin not options margin.

I think for functionality regarding spreads - here is what I understand from talking to multiple parties -
#1. IBKR (Interactive Brokers) is the best for complex strategies and visualizing margin and probability on one screen.
#2. is a tie between Schwab Street Smart Edge and Fidelity (I personally use Street Smart)
The rest are bottom feeders (in the USA)

Margin and trade fees can be negotiated easily and success depends on account size and maybe moving it over.
For me having an auto load of "roll spread" and other such functions is a big plus in IBKR and Street Smart.

 

[stealthyc]

I think for functionality regarding spreads - here is what I understand from talking to multiple parties -
#1. IBKR (Interactive Brokers) is the best for complex strategies and visualizing margin and probability on one screen.
#2. is a tie between Schwab Street Smart Edge and Fidelity (I personally use Street Smart)
The rest are bottom feeders (in the USA)

Margin and trade fees can be negotiated easily and success depends on account size and maybe moving it over.
For me having an auto load of "roll spread" and other such functions is a big plus in IBKR and Street Smart.

Thinkorswim (TD Ameritrade) is not a bottom feeder. Margin and trade fees are negotiatable as well, and it has all kinds of nice roll functions and complex trading strategy assistance.

 

[AquaY]

I think for functionality regarding spreads - here is what I understand from talking to multiple parties -
#1. IBKR (Interactive Brokers) is the best for complex strategies and visualizing margin and probability on one screen.
#2. is a tie between Schwab Street Smart Edge and Fidelity (I personally use Street Smart)
The rest are bottom feeders (in the USA)

Margin and trade fees can be negotiated easily and success depends on account size and maybe moving it over.
For me having an auto load of "roll spread" and other such functions is a big plus in IBKR and Street Smart.

Thanks Since I have a nice size IRA at Schwab I guess I should try them first. They only gave me Level 1 clearance though and I want to do spreads.
I'll apply for an upgrade. maybe do a CC just so they see a trade or 2 first

 

[corduroy]

Off Topic but related and I'd like to ask it here instead of making a new thread.
If anyone here feels this is a distraction just say so and i will make a thread.
This is mostly a question for Americans because that's where I live.

What broker do you use and like?
How good are their trading systems ? Especially for options and tracking positions. What fees are charged and what's their margin loan rate if you know?
I use Etrade. They have a good over all platform; Etrade Pro which I do like for my main positions.
You can add and subtract what you want to see, how it's arranged, sort and resort etc like I'm sure many other platforms do.

I use Power Etrade for doing my Options scenarios and it's pretty good but lacks some useful tools and could be easier to enter complex strategies.
For example to enter an Iron Condor I have to enter all the information except the underlying of each leg myself. It's annoying when you want to run several different ICs

To see margin impact you have to use their regular website instead of having it on the screen you are using. It does show what your buying power after the trade will be but in order to see what it's impact is you have to note what your buying power is before entering a scenario.

I have an IRA at a mutual fund company and another account at Charles Schwab and am thinking of moving them to another broker with better systems than Etrade so I can trade options in them.
I was thinking of Ameritrade but would love to hear feedback from people actually using it.

One of the great things for me with Etrade is my margin account. Because Etrade bought out Brown & Co years ago where I had my account originally, they have to honor my Brown rate agreements. My margin rate today is 3.09%
Obviously this is for loan margin not options margin.

My trading accounts are split between TD Ameritrade and Fidelity. I am thinking of moving everything to TD Ameritrade. For me, the Thinkorswim web and desktop trading tools are the best I have tried. When I have to jump over to Fidelity it seems clunky. I also use Tastyworks to research trades because I like their visual tool.

 

[UltradoomY]

Thinkorswim (TD Ameritrade) is not a bottom feeder. Margin and trade fees are negotiatable as well, and it has all kinds of nice roll functions and complex trading strategy assistance.

Agreed - just forgot about them.
The founders of TOS left and started Tasty Trade which has great visuals.

 

[MaxPain]

Thinkorswim (TD Ameritrade) is not a bottom feeder. Margin and trade fees are negotiatable as well, and it has all kinds of nice roll functions and complex trading strategy assistance.

I personally use Schwab's Street Smart Edge. I prefer it over the others personally. TD is owned by Schwab FWIW.

 

[bkp_duke]

Off Topic but related and I'd like to ask it here instead of making a new thread.
If anyone here feels this is a distraction just say so and i will make a thread.
This is mostly a question for Americans because that's where I live.

What broker do you use and like?
How good are their trading systems ? Especially for options and tracking positions. What fees are charged and what's their margin loan rate if you know?
I use Etrade. They have a good over all platform; Etrade Pro which I do like for my main positions.
You can add and subtract what you want to see, how it's arranged, sort and resort etc like I'm sure many other platforms do.

I use Power Etrade for doing my Options scenarios and it's pretty good but lacks some useful tools and could be easier to enter complex strategies.
For example to enter an Iron Condor I have to enter all the information except the underlying of each leg myself. It's annoying when you want to run several different ICs

To see margin impact you have to use their regular website instead of having it on the screen you are using. It does show what your buying power after the trade will be but in order to see what it's impact is you have to note what your buying power is before entering a scenario.

I have an IRA at a mutual fund company and another account at Charles Schwab and am thinking of moving them to another broker with better systems than Etrade so I can trade options in them.
I was thinking of Ameritrade but would love to hear feedback from people actually using it.

One of the great things for me with Etrade is my margin account. Because Etrade bought out Brown & Co years ago where I had my account originally, they have to honor my Brown rate agreements. My margin rate today is 3.09%
Obviously this is for loan margin not options margin.

I have Fidelity (primary) and Schwab (secondary). I like Fidelity better due to the interface (Active Trader Pro), but I my non-scientific observation is that Schwab gets slightly faster executions and better trades for me. The downside is that my Schwab fees are substantially higher, but that could be due to the account being a fraction of the size.

 

[adiggs]

Off Topic but related and I'd like to ask it here instead of making a new thread.
If anyone here feels this is a distraction just say so and i will make a thread.
This is mostly a question for Americans because that's where I live.

What broker do you use and like?
How good are their trading systems ? Especially for options and tracking positions. What fees are charged and what's their margin loan rate if you know?
I use Etrade. They have a good over all platform; Etrade Pro which I do like for my main positions.
You can add and subtract what you want to see, how it's arranged, sort and resort etc like I'm sure many other platforms do.

I use Power Etrade for doing my Options scenarios and it's pretty good but lacks some useful tools and could be easier to enter complex strategies.
For example to enter an Iron Condor I have to enter all the information except the underlying of each leg myself. It's annoying when you want to run several different ICs

To see margin impact you have to use their regular website instead of having it on the screen you are using. It does show what your buying power after the trade will be but in order to see what it's impact is you have to note what your buying power is before entering a scenario.

I have an IRA at a mutual fund company and another account at Charles Schwab and am thinking of moving them to another broker with better systems than Etrade so I can trade options in them.
I was thinking of Ameritrade but would love to hear feedback from people actually using it.

One of the great things for me with Etrade is my margin account. Because Etrade bought out Brown & Co years ago where I had my account originally, they have to honor my Brown rate agreements. My margin rate today is 3.09%
Obviously this is for loan margin not options margin.

I'm using Fidelity and it works for me. I'm not using most of the more sophisticated trade entry / exit stuff, and only using the desktop app some for analysis. Mostly enter trades via the web app. Kind of sad when a spread close is easier in a web app than the desktop app.

Fees are .65/contract in and .65/contract out. One exception is BTC <0.65 is free commission. Actually there is a second exception when trading very low cost options. The max commission is something like 0.5% of the trade value - I've encountered that before


I plan to keep my brokerage with Fidelity, but I am increasingly ready to shift my IRA and Roth IRA over to TastyWorks. I hear good things about the interface (good). What mostly has me thinking about it is the fee structure. $1/contract in, $0/contract out, with a max of $10 on a single position.

I.e. 10 BPS is $10 for the long and $10 for the short put total, instead of $6.50 for each in and $6.50 for out for each side (thus $20 vs $26).

The value rises fast when trading larger quantities. 40 BPS is $10 in each side, and $0 out vs $26 for each in and $26 for each out. $20 vs $104 - that'll throw in a lot of sushi money quickly. At the extreme, 200 BPS would be $20 in, $0 out vs. $260 in, $260 out. Yeah.

Double all that for ICs.


The wildcard that I have no idea how to evaluate or know in advance is fill quality and speed. A consistent penny or two against me on the fill will overtake that commission improvement fast, and I won't know it as all I'll see are the cheaper commissions. Then again an options focused platform and broker might get me a penny or two improvement on a consistent basis, in which case I still won't particularly notice the fill improvement - all I'll see are the cheaper commissions.

The one way I can think of that I'll notice the fill quality is if I'm using midpoint and getting fast fills instead of slow, or even a penny or three better, rather than the penny or three worse. Actually I split the different between midpoint and bid or ask to the bad for a fast but less good fill right now.

 

[adiggs]

I would normally be doing 9/17 BPS today, but I'd like more resolution on next week before committing.

I like 745 as a floor - we'll see if that holds or not. In that spirit, piling back in with 730, 735, and 740 BPS using a $100 spread size. I'm going with this little bit larger spread size as I see effective management available down below $700. These are awfully close to the money but there also isn't much time to expiration.


I am as ready to close early on these as I am to roll aggressively out to 9/17. I guess part of my thinking is that this is sort of like selling 9/17 today in the event of a further drop in the share price pushing these into the money. And if shares move up even a little bit these will become high % profitable fast.

Small move up today plus 1/3rd of the trading time remaining going away = 80% profits on these BPS.

Close 'em out, leaving me with nothing open. Watching today for a next-week open, with a heavy bias towards opening something tomorrow at the latest. I expect the credit to be higher or the strike more distant with a Friday open over a Monday open.


I'm also staying away from call spreads (and thus ICs). When I have done these I'm so far OTM I collected like .45 and closed at .20, and I had more mental energy wrapped up in these than everything else. I think I'm being excessively gun shy after a bad experience with a smaller spread size back in June.

Something like how I got about CSP earlier in the year as well. Thus my two primary trade strategies continue to be BPS with wide spreads and lcc.