Newbie Options Trading

[Lbkmxp100d]

With Q1 production number coming out this week I would hold off until the info is released. The consensus is anything over 2k/week will work in $TSLA favor. However, if they don’t meet that number then I would be ready to make a move.

 

[mongo]

With Q1 production number coming out this week I would hold off until the info is released. The consensus is anything over 2k/week will work in $TSLA favor. However, if they don’t meet that number then I would be ready to make a move.

So wait for the start of the swing in either direction and then move in if positive, or wait longer if negative?
Elon seems to have indicated 2k/wk rate in new e-mail.
Market Action: 2018 Investor Roundtable

 

[MitchJi]

So.. I picked some more shares in the low 300's a couple weeks ago (we know how that went). Thinking of shifting some of that to a DITM J20 call which would end up with a lower breakeven price than the shares. Seems low risk based on Tesla's recent progress. What should I watch out for?

Why DITM now with the SP being extremely undervalued?

 

[mongo]

Why DITM now with the SP being extremely undervalued?

It was risk aversion (after the big drop, I was hesitant whether 250-260 would hold), and the break even points wern't that different for DITM, so the only issues was the number of contracts one could get. I was looking at only doing one, but ended up staying in shares...

 

[steve3]

Why DITM now with the SP being extremely undervalued?

Mitch, for J’20s, what strikes would you look at, for example if SP dips to 250/260 ?

And if desiring a time-cushion in case profitability slipped to, say 19Q1 & Q2 instead of 18Q3 & Q4, would you look at different strikes?

 

[MitchJi]

Mitch, for J’20s, what strikes would you look at, for example if SP dips to 250/260 ?

And if desiring a time-cushion in case profitability slipped to, say 19Q1 & Q2 instead of 18Q3 & Q4, would you look at different strikes?

With j19’s I probably buy options that are close to the money so that I’m not paying for intrinsic value but the delta will increase rapidly and to minimize the risk.

With J20’s I’d get something like $350’s.

Note:
The SP does not need to go over the strike price to make a huge profit on options purchased when the SP is much lower and between now and j20 an SP of over $350 is a slam dunk IMO.

Not an advice.

 

[Nate the Great]

@MitchJi

With the current drop 9/29, assuming we don't get beyond 300. With J20's what strike price would you recommend? ($350)

I'm curious how you are you currently positioned?

I'm at 70/30, my only options are 300 ATM J20.

Thank you,

N

 

[marvinat0rz]

Here's a piece of paid Tesla FUD on reddit. Paid advertising. I guess you could argue that this constitutes advertising for some battery company rather than an attack on the sentiment towards Tesla, but I thought it was interesting as a blatant piece of critical, paid commentary.

Imgur

 

[MitchJi]

@MitchJi

With the current drop 9/29, assuming we don't get beyond 300. With J20's what strike price would you recommend? ($350)

I'm curious how you are you currently positioned?

I'm at 70/30, my only options are 300 ATM J20.

Thank you,

N

I currently have 72 J19 $380’s that are deeply red, mostly purchased when the SP was about $350. I added about six more (all in) a few days ago. I’m planning to move some of them to something like October or November $350’s just before the October numbers and again just before the Novelmber ER.

Obviously an extremely risky strategy and Not an advice. But I’m very confident that by the November ER the SP will hit $400.

 

[Nate the Great]

@MitchJi

If I wanted to do a short term trade. from 290 to 350.

I feel that the SP will hit 350 by late Sep or early Oct.

What option would you recommend?

I'm assuming an early 2019 Jan to Aug.

Thanks again,

Nathan

 

[bdy0627]

@MitchJi

If I wanted to do a short term trade. from 290 to 350.

I feel that the SP will hit 350 by late Sep or early Oct.

What option would you recommend?

I'm assuming an early 2019 Jan to Aug.

Thanks again,

Nathan

October monthlies (OCT19) at $330 or $340 will give you the highest profit in that scenario by quite a bit. The $330 strike yields 147% if the stock is at $350 by Oct. 2nd. $340 yields 146%.

 

[Nate the Great]

@bdy0627

Thanks.

 

[ggr]

@bdy0627

Thanks.

This is a simple and straightforward calculation. If you truly believe, 100%, that the number is $350 on October 1, five minutes with a spreadsheet and the current prices will tell you the answer (as @bdy0627 did). The hard part is figuring out the probabilities, what if it is lower, what if it is higher, what if it happens sooner, etc. Some of these lose you money, some of them make the answer non-optimal.

The simple answer to the overly simple question you asked is that the optimal strike price will always be approximately half way between the current price and the expected strike.

Now I don't want to sound like I'm attacking you, but if you couldn't do that calculation either in your head or with a spreadsheet and the current prices, you shouldn't be trading options.

 

[Nate the Great]

Good point about not doing the trade. I have options in place, but they are more simplistic. I currently have ATM J17 20 Leaps 300.

We are always learning. Everyone has something they do not know, yet fail to ask or search for.

I always discuss a trade, usually in private message.

Now with that being said no I do not have the calculator you referenced. Right now I am using Options profit calculator.

I truly appreciate the caution. I have seen many members get roasted by overly optimistic members.

If I end up making this trade it would be May 2019 - June 2019. I haven't made the trade as of yet.

 

[Revhappy2]

I sold 3 J20 50 PUTs for $3.8 yesterday. My risk tolerance is so low as I have already lost a bit of money trading higher strike options.

 

[Mario Kadastik]

I sold 3 J20 50 PUTs for $3.8 yesterday. My risk tolerance is so low as I have already lost a bit of money trading higher strike options.

What’s the point? You gain about 1140 total ash, but lock up tons of more margin for 1.5y. Is that actually a useful yield?

 

[Revhappy2]

What’s the point? You gain about 1140 total ash, but lock up tons of more margin for 1.5y. Is that actually a useful yield?

Thanks for the feedback, really appreciate it.
I had a look at CBOE website, doesnt seem like the margin is a lot, does it?

 

[jbih]

I'm as optimistic now as I've ever been with regard to the stock price, so I want to, for the first time, buy some options. I think I'll try to spread between Jan 19 and Jan 20 and buy where the price is around $10, for example June 21, strike price 460, price $10 according to TSLA Option Chain

I hope the broker doesn't take too long to confirm my permission to buy options and transfer some money from EUR to USD!

 

[chiller]

I dipped my toe in options for the first time on Friday, since I knew the stock was cheap, but did not have enough money to buy any more stocks. I bought one call with a strike price of 315 expiring on Oct 5th. The price at the time was 1.3. Later on Friday it was down to 0.6x.

I sold it yesterday for 8.45! Maybe I need to do more option trading...

 

[neroden]

I dipped my toe in options for the first time on Friday, since I knew the stock was cheap, but did not have enough money to buy any more stocks. I bought one call with a strike price of 315 expiring on Oct 5th. The price at the time was 1.3. Later on Friday it was down to 0.6x.

I sold it yesterday for 8.45! Maybe I need to do more option trading...

Don't get too tempted. This is how you can get in too deep with options, by having early success. Be *careful*.