I have some 250 calls and I'm definitely holding them till next week. I think we are just seeing the beginning of a strong upwards movement the coming weeks. I will try and hold them until after the Gigafactory announcement, that's when phase two of short covering will begin hopefully.
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Newbie Options Trading
- Thread starter Jonathan Hewitt
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- investing options TSLA tsla stock
I have some 250 calls and I'm definitely holding them till next week. I think we are just seeing the beginning of a strong upwards movement the coming weeks. I will try and hold them until after the Gigafactory announcement, that's when phase two of short covering will begin hopefully.
I would definitely hold them till next week. The monthly options expire this week, and that by itself will apply pressure to force the price up. Sometimes you can see a lot of short selling at the end of the week, aimed to force the closing price to be just below some nice round number, e.g. $220. But then the cork pops out on the following Monday.
mershaw2001
I'm short the short sellers
My thought is that today was an underreaction, where the shorts are wondering if the longs will start to sell into the rally. I expect we see further upside in the next 3 days.
Can you clarify? Options on Panasonic stock? In the US, this is only available for QIBs, right?
Panasonic has had a great couple of years, and I expect them to profit nicely from H2 battery deliveries to Tesla as well as the giga-factory. They have a ton of other business segments, though, and they'll be at the mercy of Abenomics, for better or worse.
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InTheShadows
Active Member
So a down day like today is better to roll up deep in the money LEAPS? I'm thinking that since their delta is 1 and if I'm rolling them up to a delta of .5 today would be a good day. Is my thinking correct?
Yes, you could do that, but if you're talking about TSLA, the options premiums are still pretty high and tbh the stock isn't even down much right now (~$243).
my take would be yes, if you mean doubling the contracts (same $ invested) for the same Net Delta;
also assumes you are still bullish from here of course. That roll-up will afford you a higher return on TSLA future rise for the same current investment (and the same current Delta tracking);
would the new strike still be ITM?
InTheShadows
Active Member
I was thinking at the money. I didn't look at the prices yet, I was just looking at my positions and started thinking about rolling them up.
InTheShadows
Active Member
I sold some calls to open today. 257.5 weeklies. I hope they expire worthless. I sold them when we were at 255 about an hour ago and already made 35% on them. Worst case scenario is the bull ones a running but if that happens I will be happy too because I have lots to cover them.
InTheShadows
Active Member
Tomorrow.
this looks like it will be my first successful play selling calls. Tomorrow will be another day though. I'm contemplating buying them back though. They have lost over 50% of their value now. I'm a little uncomfortable with a bear position on TSLA because any number of catalyst could come out any minute and set the bull free. I'm also hoping that the flag will fully form, (Monday it looks like). That is also a concern I have.
I have plenty to cover it, but it is the only weekly I have for this week which means it has a lot of leverage power if we do get a breakout.
Does anyone ever set a stop loss on something like this?
Chickenlittle
Banned
no but if i am concerned i will buy very deep in the money calls (like strike 100-120 ) for maybe jan 2015. almost no premium. if your stock is called away, you can replace it by exercising these options and not loose any money (but keep the money you sold the calls for). if not called away you can act more aggressively on selling calls knowing you have these options.Tomorrow.
I'm a little uncomfortable with a bear position on TSLA because any number of catalyst could come out any minute and set the bull free. I'm also hoping that the flag will fully form, (Monday it looks like). That is also a concern I have.
I have plenty to cover it, but it is the only weekly I have for this week which means it has a lot of leverage power if we do get a breakout.
Does anyone ever set a stop loss on something like this?
Oh NO! Another problem with stop loss orders, is that when they trigger, they become market orders. They don't necessarily, or even often, trade at the point you set your stop. And options like these with lifetimes measured in hours are always very thinly traded.
Suppose (just because I find it easier to play with numbers) you sold 10 covered $257.5 weeklies for $2. At this instant, they might be around $1. So you think, "Gee, I'll put a stop loss buy-to-close order at $1.50, lock in at least a 25% profit even if the stock goes up." Now, some reckless person for reasons only he knows, offers to buy for $1.50, and his trade happens, and triggers your stop loss order. Now you have 10 contracts on the books, which the computer will happily fill, even though the only other sellers are at $10! You just lost 4 times what you invested originally.
Since you sold a covered call, if you just sit on it until it expires, the worst that happens is that you miss out on any profit on those shares if the stock price goes over $259.50 (strike plus what you already pocketed). There are worse things...
I am another person who is in the camp of staying far away from stop loss orders ever (again). It's like trading on your emotions, except without even the benefit of taking a deep breath. And I'm not just talking about options.
InTheShadows
Active Member
Thank you for the explanation. That is along the lines I was thinking. Since this is my dip the toe in the water for this type of trade I'm not that concerned about them and the position is small. I have alerts set so I get texts if a rally begins.
However I know how strong the leverage is on these short term calls since I have been on the other side many other times. Regardless their break even is 259.90 so unless we have a breakout I think I am safe.
Mario Kadastik
Active Member
Just in case you haven't used them, there are stop limit orders. Theya re the same except the stop triggering will not be market, bt limit order. This way you could set a stop to 1.4 with limit 1.5 for example. If the above mentioned freak trade occurs the limit order will stick around not executing until someone takes the other end or you cancel.
pz1975
Active Member
If you want to lock in your profit and avoid the pain of a bull run, why don't you buy the same number of $262.50 or 265 calls? They will be very cheap and you will lose a little profit but maintain most of the upside and take the risk away.
InTheShadows
Active Member
Not that, sounds like a mighty fine idea. Would that be a bear call spread then? Sounds the opposite of when I make the delayed bull call spreads.
pz1975
Active Member
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