EVNow
Well-Known Member
In case they go ITM.
I usually buy back at 0.01 or roll once the value falls below 10 cents. Basically, once the value goes very low (far OTM), better to roll to capture higher delta (but at higher risk).
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Wiki Selling TSLA Options - Be the House
- Thread starter adiggs
- Start date
I usually buy back at 0.01 or roll once the value falls below 10 cents. Basically, once the value goes very low (far OTM), better to roll to capture higher delta (but at higher risk).
EVNow
Well-Known Member
Is there some data on when best to BTC or roll ?
- Better to wait for Friday or roll when the call is ATM ?
- Best to roll on Thursday or Friday .... ?
I've had the experience of having CC go deep ITM and prefer to avoid it. I find the worst part about it is seeing the share price appreciate but the account liquidity gets retarded by the CC soaking up the gains the shares make. I know there's always the possibility the share price will come back to the strike but it's hard to keep rolling when you're expecting a major rally.
I had a few 177.5CC for this week left over from a poorly timed day trade last week. I BTC a bit over half of them during the MMD today but have also been trying out some other strategies to deal with them.
A couple of days ago I rolled the original 177.5CC into 182.5CC for the same 12/2 expiry. This cost me $2.8 but I could have timed it better and got a fill at $2.5. So if you're going to BTC and you expect the close to be well above the strike, this was an effective way of taking $5 off the BTC price for a cost of say $2.5. Similarly if I say expect a close of $190 tommorrow then I can currently roll the remaining 182.5CC to $190CC for around $6, a saving of $1.5 off the BTC. Similarly a roll to $195 would cost around $9, saving $3.5 on th BTC. This needs to be done while there is still some time value in each strike. If you just want to BTC then it's often best to wait for a MMD on Friday or when time value is already low.
Another option to consider instead of rolling out a long way is to do a combination roll into a Bull Call Spread. For example, rolling the 12/2 182.5CC into a Feb'23 210/240 Bull Call Spread. This currently costs around an extra $21 ($2100) and will also add around $2000 in maintenance margin to my account. The Feb'23 expiry was selected as this is the first available after the Q4'22 earnings report. If TSLA closes above $240 on the 17th Feb 2023, then this spread is worth $3,000. Netting you a profit of $900 to close out the CC, compared to say a loss of $1250 (less inital premium) if the CC is BTC near a close at $195. Of course the risk here is that if Tesla is below $210-240 by February then it's an increasingly bigger loss.
I had a few 177.5CC for this week left over from a poorly timed day trade last week. I BTC a bit over half of them during the MMD today but have also been trying out some other strategies to deal with them.
A couple of days ago I rolled the original 177.5CC into 182.5CC for the same 12/2 expiry. This cost me $2.8 but I could have timed it better and got a fill at $2.5. So if you're going to BTC and you expect the close to be well above the strike, this was an effective way of taking $5 off the BTC price for a cost of say $2.5. Similarly if I say expect a close of $190 tommorrow then I can currently roll the remaining 182.5CC to $190CC for around $6, a saving of $1.5 off the BTC. Similarly a roll to $195 would cost around $9, saving $3.5 on th BTC. This needs to be done while there is still some time value in each strike. If you just want to BTC then it's often best to wait for a MMD on Friday or when time value is already low.
Another option to consider instead of rolling out a long way is to do a combination roll into a Bull Call Spread. For example, rolling the 12/2 182.5CC into a Feb'23 210/240 Bull Call Spread. This currently costs around an extra $21 ($2100) and will also add around $2000 in maintenance margin to my account. The Feb'23 expiry was selected as this is the first available after the Q4'22 earnings report. If TSLA closes above $240 on the 17th Feb 2023, then this spread is worth $3,000. Netting you a profit of $900 to close out the CC, compared to say a loss of $1250 (less inital premium) if the CC is BTC near a close at $195. Of course the risk here is that if Tesla is below $210-240 by February then it's an increasingly bigger loss.
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This is actually how TSLA goes at reaching a target. Flagging under it after a run up -> calls loaded -> gap up next morning before profit taking. News will be whatever big bois deem sufficient to get that final push going.
Buying/wise to buy 12/16 205 or 210 calls while down here @ 193-194?
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not-advice
Regarding the 190 puts, the problem with rolling an OTM put (by roll, I am specifically referring to a roll type ticket, in which the current position is closed and a new position opened on the same transaction) is that you one side or the other is disadvantaged in the roll. And its usually the new position being opened where the impact of being disadvantaged is larger.
So my own approach, in almost all circumstances, is to break the two events apart when dealing with OTM options. I only use rolls on ITM options as a position saving technique.
Of course nothing is free - if those two actions are broken apart then it could easily turn out that the seemingly bad open in the new position is really a great open (in the case of puts - the share price keeps going up).
At least for me this realization is what changed my approach a year ago to staying in the market, to taking advantage of "good" opens, "good" closes, and being ready and willing to be out of the market -- sometimes for days or even weeks.
There's likely to be a MMD like there was today and my personal preference is to buy them then. If buying today you need to factor in the effect of theta decay overtnight.
This exactly what I did today. I waited for the MMD and bought 40 x 12/2 $200 calls for $1.15 each. If I'd waited a bit longer for the full MMD at 10.30am, I could have bought them for $0.85. These calls were worth $3 at the open (so a decent day trade with CC on the way down). Then it was just a case of waiting for the rise after the MMD to STC the calls. I ended up selling at $1.75 but could have gotten $2 if I'd timed it better. So a profit of $2400 out of a potential max profit of $4600 for around half an hours work.
Sorry no hard data. In general your decision to roll should be based on how close the SP is to your strike. I normally roll when it goes ITM and stays there at least for one hourly candle.
don't get high on your own supplies.
OK, BTC 20x -c180 @$17.9 - impeccable timing, just before we dropped to the day low, but there you go, timing the market is hard and tbh it looked at that moment that it could break out, so decided to get out of it rather than risking a worse situation. That's a net loss of $14.8 per contract, but somewhat mitigated by 10x -p180's @$5.1 which look very, very likely to expire and 10x -c195's @ $2.25, which I'm looking to let exercise, so weekly loss is net ~$11 per contract = not great, but could be worse. Serves me right for making an impulsive trade with 20x contracts
Thought about rolling out to next year, etc., but as I don't have a roll function it's easy to rethink these things afresh, rather than blindly send them up and out... so the new positions for next week are two straddles 10x 195 $7.1 for each side of the trade = +$14.2 and 10x -c200 +$13.1 for the puts +$3.1 for the calls, net +$16.2
My rationale is that TSLA appears to have bottomed-out, I see a sentiment shift recent days and analysts making "too low" noises, also we've held most of the gains since bottoming, performing well on red macro days. So I'm looking for a consolidation in the 190's, and anywhere around there newt week would be fine
Can allow another 5x calls to exercise from here (not including this week's 10x -c195's), then all my "cheap" shares are used up, after that I play to the put side a little more aggressively
Thought about rolling out to next year, etc., but as I don't have a roll function it's easy to rethink these things afresh, rather than blindly send them up and out... so the new positions for next week are two straddles 10x 195 $7.1 for each side of the trade = +$14.2 and 10x -c200 +$13.1 for the puts +$3.1 for the calls, net +$16.2
My rationale is that TSLA appears to have bottomed-out, I see a sentiment shift recent days and analysts making "too low" noises, also we've held most of the gains since bottoming, performing well on red macro days. So I'm looking for a consolidation in the 190's, and anywhere around there newt week would be fine
Can allow another 5x calls to exercise from here (not including this week's 10x -c195's), then all my "cheap" shares are used up, after that I play to the put side a little more aggressively
Lol. 100%
Trying to recoup my $5k BTC 12/2 200 cc loss. Maybe I’m too emotional and need to separate the two
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yes, remain vigilant and don't get caught up in the heat of the moment and noise
it's still a bear market and yesterday was just a speech - bulls still need to do the work of climbing over TA lines and it's not overnight and MMs are still in control (as we saw this morning)
no idea if it's the start of a bull run or just another bear rally or yet another bull trap, etc... until then, i'm still defensive mode on all trades
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on 1-hr chart... a single doji candlestick usually means even fight between bulls/bears and no one has clear control
we have 3 in a row on low volume, i wonder what that means... extended consolidation? or MM preventing payout of c200? huge res on 197 fib .618
we have 3 in a row on low volume, i wonder what that means... extended consolidation? or MM preventing payout of c200? huge res on 197 fib .618
When it comes to stock prices I believe the rule is the most nefarious cause is probably the true one ;-)
EVNow
Well-Known Member
I usually roll once the OTM option gets quite low in theta and use limits. I agree breaking is probably a better thing - and then try to time the market for max premium on the sell side. Ofcourse we won't always get it right.
EVNow
Well-Known Member
This is what I'm worried about .... for 2023. Days of tight supply may be over for the industry .... and club that with any kind of real recession would definitely soften the auto demand in general. Tesla is also going to be ramping up supplies - and may have to cut back some prices, reducing margins.
2023 will see the IRA subsidies kick-in, which ought to give quite some pricing flexibility
Added to that, I expect we'll see some CT news in Q1, possibly possibly a configurator
I'm more worried about the US sales end from now until year-end, rest of World seems to be soaking-up all they can get, but the US demand might be soft ahead of the subsidies, might
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Not really worried about 2023. Built in price cut of 3750 to 7500 thanks to IRA. And tight supply for BEVs will be around for a few more years. Legacy needs to worry about their ICE cars for many reasons.
Not really worried about December either, but Tesla is price cutting to stop everyone from telling them they will see them in January. So of course, 'demand' issues.
Thinking MM and TSLAQ may have found their latest target with this news.
If you are wondering why it has not already hit the news feeds... I would guess the hedgies and such need to position first.
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EVNow
Well-Known Member
True. What about ROW ?
BTW, we didn't take delivery of our Y because the lease price has skyrocketed. Even with IRA, I expect similar leasing price next year, since the price of Y has gone up quite a bit since we booked early this year. Tesla cancelled our booking after giving a one-week warning.
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