jeewee3000
Active Member
I had to look it up because I forgot what happened exactly.I know this is a very old post, but I’m enjoying reading through some of these older trading thread. So, did you roll those LEAPS forward? I’m assuming that the prices are all pre-split, so your $1000 strike is like $200 today. Selling that one and buying a bunch of JAN23 $1500 ($300 today) in your example looks like pure genius today. Did you hold or cash out?
My post was June 11th 2020. SP was around $200 at the time. I held on to the JUN22 $1000 LEAPS during the summer rise in anticipation of the stock split.
The first day after the split (August 31st) I sold 80% of the LEAPS to shares at what seemed a local high (just under $500) and used 90% of the revenue to buy shares. My reasoning was: odds are we are going to drop more likely than keep running higher. I wanted to keep exposure to TSLA but derisk some. On the other hand I didn't want to be completely without LEAPS in case the stock kept going like mad.
My instinct/guesswork seems pretty accurate in hindsight, since we dropped to $330 days after (six trading days to be exact).
However, during day three of the drop (around $410) I used the 10% revenue of the sold LEAPS to buy SEP22 $1000 's.
These crashed in value, so halfway september I sold the remainder of the JUN22's and used that cash to dollar cost average SEP22 $1000's during september and october. This brought my original purchase price of the SEP22's from $107 to around $74.
So I didn't exactly roll forward, but I did do so on a dip.
Since then the SEP'22s have peaked around $188 but:
- the moment they reached $117 I sold 2/3 of those SEP22's since that covered the total cost of all the SEP22's.
- the remainder of the SEP'22s I let ride and I was planning on selling them at a SP500-inclusion squeeze. I had a sell order and everything (for $250).
That price never triggered and they dropped to $123. Therefore: I am letting them ride some more until one of following:
A) the TSLA stock price explodes due to some catalyst (Q4? Q1? FSD? second stock split?) and we reach what I feel to be a local high. In this case I would sell the SEP'22s and either stay in cash fully or convert part of the revenue to shares.
B) the stock price stagnates or declines in the coming months.
By August of 2021 I want to get rid of them either way, probably rolling forward with extra cash that I can save up by that point in time.
There, that was exactly what I did. Writing this down was a good reminder for myself of my current position and plan, as well as a proper review of my earlier decisions.
EDIT: option strike prices are presplit prices. Stock prices and option premiums are all postsplit pricing. Sorry