not sure, but below is the reason i panic closed all my -p at today's open, market order
the one thing i am liking is my B/W -c180, it's nonstop roll gift that keeps on giving
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Wiki Selling TSLA Options - Be the House
- Thread starter adiggs
- Start date
the one thing i am liking is my B/W -c180, it's nonstop roll gift that keeps on giving
I’m looking into trying a couple B/W’s. Can you outline what your -c180 looks like when going to set it up to open.
sp is 182.75, so buy 100 shares and
- STO 12/9 -c185, credit 4
- STO 12/9 -c182.5, credit 5.10
- STO 12/9 -c180, credit 6.45
- STO 12/16 -c180, credit 9.70 (my choice)
Thank you. So the intention is for them to get called away at expiration since they’re so DITM and then rinse repeat?
yeap
if bullish, get 180-182.75+9.70=6.95 income over 2 wks and lose shares (so what)
if bearish, get 9.70 income over 2 wks and keep shares, and cost basis is now 182.75-9.70=173.05
When Yoona talks. People listen! Now I’m panicked for my puts.
Bravo! That’s really cool! I’ll give it a try.
I guess one thing to consider is tax consequences for those of us not in a tax-free trading account, when the shares get called away for gain, but I guess if I buy for example at 180 and it’s called away at 180 it’s a b/e on that front.
Now the million-dollar conundrum: learning to choosing the right strikes each week ;-)
My puts have been panicked out to 2025 and I am still panicking.
Thanks for the ideas of how to fix the CSP. I'm not comfortable actioning either, mostly because some need additional capital or margin. I have to sort through what is most feasible.
Now about BPS ... I promise, I'll never write BPS again !!!! This is what happens when you roll instead of taking a much much smaller loss. You are stuck deciding how much a bigger loss to take.
If I let this exercise today at the market value of 183,600, my broker will buy the shares, I immediately sell them and also sell the long put for market, the actual dollar loss will be:
900 shares at 383.33 --> 344,997 minus 900 shares at 182.50 --> 183,600
344,997-183,600=161,397
sold shares leave me with a bill of -161,397 , less the sale proceeds of the long put, 125,865 , I have a cash loss of -35,532
I'm not happy having to take a loss either way. But I have been fortunate to be able to cover it by giving back some of what I earned this year, most of was earned after switching to B/W , CC , and CSP. It'd offset the gains from a tax perspective.
Why would I want to close this out today at using current values at -57,735? Am I missing a value in my calculation?
EDIT: I realize now that at actual time of assignment, the share difference in what I am assigned less the market value will be greater and while the long put will be worth more, it may be the same as buying back the position at that time, not the same as theoretical now.
Now about BPS ... I promise, I'll never write BPS again !!!! This is what happens when you roll instead of taking a much much smaller loss. You are stuck deciding how much a bigger loss to take.
If I let this exercise today at the market value of 183,600, my broker will buy the shares, I immediately sell them and also sell the long put for market, the actual dollar loss will be:
900 shares at 383.33 --> 344,997 minus 900 shares at 182.50 --> 183,600
344,997-183,600=161,397
sold shares leave me with a bill of -161,397 , less the sale proceeds of the long put, 125,865 , I have a cash loss of -35,532
I'm not happy having to take a loss either way. But I have been fortunate to be able to cover it by giving back some of what I earned this year, most of was earned after switching to B/W , CC , and CSP. It'd offset the gains from a tax perspective.
Why would I want to close this out today at using current values at -57,735? Am I missing a value in my calculation?
EDIT: I realize now that at actual time of assignment, the share difference in what I am assigned less the market value will be greater and while the long put will be worth more, it may be the same as buying back the position at that time, not the same as theoretical now.
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JSML
Member
In theory, having your short put leg assigned will always be better than closing out the spread yourself. This is because you don't pay the premium for closing out that leg.
When you sell the long put leg, there should be some additional slippage that will cost you some money.
Hmmm…maybe we go up tomorrow….(or not).
JSML
Member
This is similar to what I've done with my DITM short puts on SQ and SHOP.
1) Roll puts out and down 3 to 6 months
2) Sell CC against the put position. This requires no extra margin. (I sell 2X CC most of the time against the puts. But OTM, what I would consider safe.)
3) Buy back 1 put at a time when premiums from CC selling builds up.
SQ and SHOP are very volatile. Some weeks I don't touch them due to the volatility or low premiums.
Using the premiums from CCs, I've been able to buyback about 50% of the short puts.
If you sell CC against puts, what happens if stock price jumps and your put goes OTM and you end up with naked short calls?
Interesting. I'm not seeing how to sell CC against a CSP in the Fidelity UI. My options level may not allow.
JSML
Member
You can only sell CCs against a naked put short position, not a spread.
JSML
Member
Overall, you want to the stock price to jump to the point where your put is OTM. I only do these with DITM short puts. On the naked short call side, the hope is they are shorter term and you are managing the positions. If the SP moves up, eventually you turn the spread into a strangle.
For example. My SQ position right now is
1) 10X Dec 16 expiration -p 70
2) 10X Dec 9 - c 72
3) 10X Dec 16 - c80
SQ SP today is 63.25 (Last Friday at 68.18 when these call position were put on)
SQ SP was as low as 51 at a few points.
The SQ short put position I've been managing for about 6 months, so it is a long process.
Let me be clear: To me CC means covered call, and I must own 100 shares for every 1 CC written. I cannot sell a CC against anything EXCEPT shares that are in the same account. I can’t do it against cash, puts, or even UFOs. FWIW, I have no margin or borrowing allowed (in my US-based IRA). Other people with margin accounts may be able to back selling NAKED (puts or calls), which implies to me that there is NO cash or shares backing the short options sale, only margin borrowing and stupidity (sorry, but that last part is my opinion that it’s sheer stupidity to borrow to sell something that you don’t own). Selling a CSP (cash secured put) means, having 100% of the cash required to buy 100 shares at the strike price, locked away by my brokerage so that it cannot be used to back or buy anything else. So, when selling a CC, in order to gain additional premium that can be used to buyback an ITM put, I am doing that against actual shares (not against anything else). If the short term CC goes ITM, then I roll it up and out a week, and conversely the long term CSP must get closer to ATM and therefore the CSP buyback cost goes down. You can continue to roll the CC up to the same strike and date as the CSP, then you have a strangle. At that point, it’s a wait until one or the other approaches zero premium, and you must decide whether to allow exercise or continue rolling out. Hope that helps.
Slight push down Monday, the edges appear to be 180p with concentrated put interest down to 170, 200c and very little above. Pre-market is green, for TSLA as well. High 170's to mid 180s today?
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