Was looking at some options too, but IV is skyhigh. I did pick up some Nov monthlies @540 just in case.
FWIW, IV isn't that bad... current IV is only at 59-percentile.
If you're buying TSLA calls right now, especially if they're not LEAPS, definitely look into working them into a spread of some kind to mitigate volatility. For long positions I prefer diagonals, but YMMV.
Investing exactly at the worst possible time - that happens to be my superpower!
Jokes aside, I actually was aware that IV was super high in mid-July right before ER, but was so confident of the ER blowing all expectations out of the water that I got greedy. In fact, the only other time worse than mid-July was probably mid-March and I bought options then too. Hard lesson learned for the future!
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Anyways, although the short term weeklies expired worthless, most of my calls with longer expiration dates did recover and are nicely profitable. I just sold some with 21st Aug expiration for good profit, so have some cash to put to work with IV being so low (IV 30 is at 30th percentile as per Fidelity). So looking to see if LEAPS are a better deal or Oct/Nov monthlies for this year.
Dumb question...but if I wanted to sell my TSLA shares this month (life event coming up) shouldn't I just sell a slightly ITM short term call option to maximize my profit? Is there anything flawed with my thinking, or this the best way to go if I'm dead set on selling a certain # of shares to pay for a life event? lol.
Is anyone willing to step up and admit either losses or confusion regarding this thread, trying to follow it, or the OP?
I'm not sure many folks would be comfortable with losing 90% of a contract's value, but if you have the conviction and its a small percentage of your account balance then its hard to find too much fault with your approach.
Still, as a retail trading hack that is in no way any kind of financial adviser, I'd recommend folks consider a spread to reduce a position's Vega when buying contracts at high volatility. Especially with abnormally high volatility like we have right now, a contract can lose significant value over time [as volatility drops] without any underlying price movement. As noted I usually go with diagonal spreads (and occasionally calendars, if I'm less bullish on price movement), which I manage in the same exact way that I do covered calls. Its worth a look for sure, as are other spread combinations that may suit one's preferences better than a diagonal/calendar.
Somewhat related, when contemplating a position its always good to remember that there are two axes on a chart. Especially when times are good (let alone these bananas days with TSLA), its easy to FOMO past the horizontal axis...
I’m also surprised there’s not more interest in spreads on the forum. At current IV, their return is hard to beat with naked options. That assumes some idea of the future SP, but I question how someone could choose strikes and premiums otherwise.
when levering up, I'm buying the long leg first and will then leg in the short leg after the stock price has appreciated on a smaller part of my long legs.
are you buying spreads outright? It's emotionally hard for me to give up the unlimited upside on the entire position I must admit (however irrational that is)
The portfolio I'm working on uses spreads either ITM or DITM to generate (hopefully) 1x to 2x profit every few months. Essentially, using spreads as leveraged covered calls. Not very risky or exciting, but more tolerant to time and SP, in case macros take a dive.