I once read a very good quote -
"I would spend half my fortune, to save the other half"
Live to fight another day and keep the capital alive.
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Wiki Selling TSLA Options - Be the House
- Thread starter adiggs
- Start date
"I would spend half my fortune, to save the other half"
Live to fight another day and keep the capital alive.
Well unfortunately I was overleveraged and thought I was hedged properly, but today wiped me out. What once was a seven figure account got decimated this year with today being the final straw and got liquidated.
Learned a lot from everyone here and I wish you all the best. Gonna have to start from scratch and slowly build back my account. No margin this time
Learned a lot from everyone here and I wish you all the best. Gonna have to start from scratch and slowly build back my account. No margin this time
I took this leap of faith, living to fight another day. The roll to June 23 was incredibly less than closing it all or taking it on the other side through assignment. I'll have time and less to stress over. Now I'll patiently wait for the dust to settle before selling again to cover the outlay. Thanks all for the non-advice.
have 110K margin cushion in my personal account. Let see what next few day brings ... Hopefully I don't lose any shares, and can close TSLA calls and other stock PUTS and take big tax losses for future use
Closing all them CC's before delivery numbers was of no use
Closing all them CC's before delivery numbers was of no use
Not really, no. But $240 is $720 pre split and that doesn't sound all that unreasonable to me within the larger context of the macro environment.
My long term investor hat is think how much cheaper can it get. My short term investor hat is constantly reminding me that in the short term the share price can be completely disconnected from the long term reality, and the market can be irrational longer than I can be solvent.
Yes it is. And yes it is
The only thing I have to add is that I saw this before in the ~2015 - 2019 time period. Quarter after quarter, year after year, the financial reality was getting closer to the product and execution reality, and still the share price didn't budge. Easy to argue that the shares were over priced in the run into 2014 (and I would).
I expect the long term buy and hold to be unphased and know that this isn't a miss. Arguably it sets up the people that think this is a miss, for a particularly large beat next quarter when it gets started with 20k deliveries.
All very much not-advice.
More tangible thoughts I have beyond simply "the market can be irrational longer than I can be solvent".
TheTalkingMule
Distributed Energy Enthusiast
I'm in a similar pickle for Oct/Nov at lower strikes. My thesis all along has been ~$350 SP is inevitable "soon", so I'm doing everything possible to keep these spreads alive and buy time.
I'm going to sit on all my Nov18 expiration BPS until 3Q earnings to see what happens. All of them are below $350 struke.
The worst few I have with an Oct21 expiration I'll need to double the number of contracts, widen the total margin, and roll out. Then hope the $310/266 ones can be rolled by earnings week and hopefully not get early executed.
Lots of hoping.
Yours are for Dec. Do you not see SP likely appreciating from here between now and early Nov? Huge pile of earning about to hit the books in 2 weeks.
Also, are you not near total loss on these? How much cash can you salvage at this point? If it's me I'd be looking to roll them to maybe March and have 4Q earnings on the books as well. See what happens.
I guess it depends on how much money we're talking!
Best of luck.
Thanks for asking. The problem wasn't doubting appreciation... I did hold on this long
I do see the stock come back to the 3's before year end, maybe even before month end. Today I had .70 left of extrinsic, any more it'd be too close for comfort, would have risked early assignment if this downward trend continues. Beginning of last week I had $3 , that slipped to $2 by end of week. I went in over my head at the time I rolled to December. To buy time, I rolled the same strikes to June for about 14% of what they'd cost to close out or risk assignment followed by an immediate sell for the same sizable loss.
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SebastienBonny
Member
Anyone planning selling CC's at strikes (far) below avg cost should we stay at these SP levels?
As it stands, I'm considering going to a 280 strike with a 300 cost base, because that still seems manageable short term if needed.
Any *not advice*?
As it stands, I'm considering going to a 280 strike with a 300 cost base, because that still seems manageable short term if needed.
Any *not advice*?
I have a bunch of Jan'23 366.67/400 BPS that are being used to support part of my share count. I've had them since earlier in the year and have added a bit as we've gone up and trimmed as we've gone down (not always possible). With this dip they are getting low on Extrinsic value so I am looking to change some or all of them to gain some extrinsic/time value. I find a good way to approach these DITM BPS is to just think of them in terms of their monetary and margin value and less like a regular short term BPS where you're more focussed on strike/expiry.
In my case I will probably keep the strikes the same but move out to a mix of March and June'23. To keep the same total monetary value I will be increasing the number of contracts. This will also increase the maintenance margin requirement but on Portfolio margin this isn't large and just reduces the margin available to trade each week a bit. I'm still confident on them expiring worthless at some point and in the meantime they've been very useful in sustaining my share count and CC earning potential.
Edit: I'm also trying the Papafox approach of rolling the same number of contracts/strikes to a later expiry. If I'm condfident the stock will recover I STO the new position first (as long as sufficient margin) and then BTC the old position when it's value has come down after the stock recovers a bit. (I started this with a few yesterday). Ideally this will pay for the initial difference in price between the two expiries.
280 is only 12% OTM so i am not sure it's safe (not advice)
TSLA can rise violently (Mon to Fri):
my temp BW's 279 CB still gives decent income even though prems for 10/21 collapsed by 50% yesterday; i am not changing the strike; my plan is to keep on rolling (forever) until it eventually expires because the shares by themselves sitting in the account are useless anyway
i suspect moving the strike closer to sp is risking a whipsaw especially in Oct, supposedly a bear-market killer
I got assigned overnight on 15x 416.66 puts with an expiry date of January.
My broker just called me
The 2 last 7% drop killed all the remaining extrinsic value.
I don’t have time to sell back these shares and sell puts today but will have to do so to avoid having to pay too much on margin
SebastienBonny
Member
Thank you! I'm actually not looking for an ultra safe CC, but don't want to take too much risk as well when selling below cost base.
Most of the time I can follow SP closely and when selling below cost base I have the habit rolling CC when the SP gets to a point where rolling 10-15 dollars higher one week further switches from credit to debit. The risk is you can't predict what happens pre and after market...
chiller
Member
Ouch.
And here I was thinking my dec 400's were safe. I'll better move those out in time ASAP.
Thanks for the heads up!
Well unfortunately I was overleveraged and thought I was hedged properly, but today wiped me out. What once was a seven figure account got decimated this year with today being the final straw and got liquidated.
Learned a lot from everyone here and I wish you all the best. Gonna have to start from scratch and slowly build back my account. No margin this time
Well I found out this morning I now have a $625,000 margin to pay with theses 1500 extra TSLA I bought at 416.77$
My average cost will now soon be higher than the actual TSLA share price.
I got assigned 42 DTE in July and now got assigned over 55 DTE again.
Looks like my broker is taking all the early assignments of the market.
My brothers December 400 Puts were assigned last night. He is selling the shares with a trailing stop loss, and sold the long leg of the BPS (I don't remember the strikes).
I was assigned this morning as well for puts $383.33 exp 11/18.
I've had puts DTTM before and never assigned 6 weeks out. Wonder why all these puts are being assigned? Is this an expectation of the bottom? Is money flowing back into the market?
jeewee3000
Active Member
Tough days for many. I was also cutting it (too) close with margin, but fortunately was mostly in CSP's. My earliest BPS were JAN2023 (-383.33p/+283.33p).
The drop to the 240's took away most of the theta value left on those BPS'es, so I rolled them out to JAN2024 and beyond.
My CSP's (10/7, 10/28, 11/18, different strikes between 275 and 330) I rolled to JAN2023 (300's and 333.33's).
The above measures were taken because:
- I wanted to avoid early assignment;
- I have little hope for us to reach $300 again before Q4 P&D (maybe pessimistic, but macro's are really in a downtrend with no end in sight);
- the moves above free up margin, margin which I promise myself NOT TO USE but to leave as buffer in case we go down further;
- I'm getting a Model Y by December/February and want some free cash to pay for it. I don't want to depend on the "hope things improve" strategy but wanted to establish a stable portfolio position now.
The only moves I'm planning between now and January are:
- sell some cc's upon (big) spikes, should there be some;
- if a big enough spike: maybe convert a JAN2023 CSP to a cc or two, to hedge for further downside and to free up margin;
- if we stay flat or go down, I'll roll the csp's eventually (when theta gets close to zero).
Good luck to all. By June 2023 I expect we'll laugh about all this. By then I can imagine macro's having stabilised somewhat, maybe end of the Russia/Ukraine conflict, and a lot of good Tesla news (rising earnings, car/battery/storage ramps further along, start of Semi and Cybertruck production, new Gigafactory announced, etc). We've said all this before, but Q4 '22, Q1 '23 and Q2 '23 should really show the world what a great business Tesla is running.
I'm just making the moves I deem necessary to:
- keep my sanity;
- preserve my capital;
- prevent margin calls.
My main "fault" I made in the last few months was to open too many positions thinking the stock would definitely be around $3XX by Q3 P&D and leaving too little margin/cash unused should the doomsday scenario play out.
I intend to be even more conservative with cash/margin in the future and not be distracted by wishful thinking when playing around with compound interest calculators.
Let's hope the situation improves soon. In the meantime, stay safe. And thank you to all of you contributing to this thread, I learn different things from each and every one of you and try to apply lessons learned by others in my own trading.
The drop to the 240's took away most of the theta value left on those BPS'es, so I rolled them out to JAN2024 and beyond.
My CSP's (10/7, 10/28, 11/18, different strikes between 275 and 330) I rolled to JAN2023 (300's and 333.33's).
The above measures were taken because:
- I wanted to avoid early assignment;
- I have little hope for us to reach $300 again before Q4 P&D (maybe pessimistic, but macro's are really in a downtrend with no end in sight);
- the moves above free up margin, margin which I promise myself NOT TO USE but to leave as buffer in case we go down further;
- I'm getting a Model Y by December/February and want some free cash to pay for it. I don't want to depend on the "hope things improve" strategy but wanted to establish a stable portfolio position now.
The only moves I'm planning between now and January are:
- sell some cc's upon (big) spikes, should there be some;
- if a big enough spike: maybe convert a JAN2023 CSP to a cc or two, to hedge for further downside and to free up margin;
- if we stay flat or go down, I'll roll the csp's eventually (when theta gets close to zero).
Good luck to all. By June 2023 I expect we'll laugh about all this. By then I can imagine macro's having stabilised somewhat, maybe end of the Russia/Ukraine conflict, and a lot of good Tesla news (rising earnings, car/battery/storage ramps further along, start of Semi and Cybertruck production, new Gigafactory announced, etc). We've said all this before, but Q4 '22, Q1 '23 and Q2 '23 should really show the world what a great business Tesla is running.
I'm just making the moves I deem necessary to:
- keep my sanity;
- preserve my capital;
- prevent margin calls.
My main "fault" I made in the last few months was to open too many positions thinking the stock would definitely be around $3XX by Q3 P&D and leaving too little margin/cash unused should the doomsday scenario play out.
I intend to be even more conservative with cash/margin in the future and not be distracted by wishful thinking when playing around with compound interest calculators.
Let's hope the situation improves soon. In the meantime, stay safe. And thank you to all of you contributing to this thread, I learn different things from each and every one of you and try to apply lessons learned by others in my own trading.
Extrinsic or 'time value' likely went near or below 0. There was no time value left for the buyer of the put to extract therefore they executed.
You should configure whatever app your broker has to show extrinisic value on your option positions.
Example: I have 333 puts that briefly went below $2 extrinsic yesterday. Knowing that I could still get credit for a roll out with that much time value left I went ahead and rolled out a month which got me roughly $1.50 in additional extrinsic value and a little premium. The move upward in the underlying this morning now has me at $5.58 in extrinsic on those puts. These have 108 DTE that I would like to get down before I roll or hopefully close if we can get back above $333 in January.
Bottom line: Whenever the stock drops you need to always know exactly what the extrinsic is on your puts if you wish not to be assigned.
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Knightshade
Well-Known Member
You don't think an ER beat in just over 2 weeks helps at all?
My 297.50 10/7 CSPs survived the night without assignment at about 60 cents extrinstic...
A roll to other side of ER (10/21) and down very slightly to $296.67 since my current strike doesn't exist for that date) gets me almost $1... Rolling to Jan 20th 2023 at $290 gets me $8.55 though I don't love locking up that much cash for almost 4 months for less than $1/week... if Q4 is as great as everyone thinks I might be better just eating a $296.67 assigned 10/21 if it happens and riding the SP up and grabbing a few pennies in "safe" weekly sold CCs in between Q3/Q4 ERs
I almost sold a bit more contracts because I thought we would breakout above the consolidation wedge heading into earnings. Finally we had a -7% move last week and -8% this week. Had I sold more Puts I would be margin called yesterday.
Instead I’ve got assigned but at least I had a 200k waiting in my corp account to partially cover for a f*** up like just happened.
I finished trying to predict the SP. It always does the opposite of what we expect.
My plan in July was to close out my Puts once we reach new ATH and then sell ATM CC before the reversal.
I did exactly just that with AAPL. However with TSLA my Underwater Puts never emerged and I got assigned, again, on the same contracts I was assigned in July. These contracts single handedly cost me 1M in taxes I will have to pay. The good news is that I had 1M in realized lost when I got overleveraged and had to close 50% of my contracts at the start of the Ukrainian war.
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