I’m starting to think the best strategy is to just sell 200 strike straddles every week, indefinitely.
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Wiki Selling TSLA Options - Be the House
- Thread starter adiggs
- Start date
An update on my current BPS saga. I had some positions at end of year that I liked, but still saw go pretty DITM on me. At end of December, not having a strong belief in the imminent jump to $200 we've had, I rolled into Jan '25 175/150s in one case, and Jan '25 135/115s in the other. The big benefit - immediate relief at not trying to guess what news was coming, when, the recovery, etc.. I intentionally went for max expiration and didn't try to guess at say a 6 month recovery. The distant expiration gave me confidence that eventually the share price would reset to something more reasonable, and the position recover.
I continue to see $200 as the very low end of a longer term reasonable trading range, so I'm still leery about cc, though I have returned to selling a few of those. In fact I closed some 240cc for this week for a net .30 each.
But the BPS saga.
The bad news - the first were worth $16 when I rolled - they've improved to 11.75. They haven't even touched $10, so they're still a big overall loss. I figured that $200 wouldn't be DITM enough for an early close or much of anything really, and I've been right.
The others are currently 6.30 (I closed some today at that price, so its exactly that
), and have been as bad as about $12. Their price isn't moving very fast as the share price goes up, nor did I expect it to. These spreads, being so much further OTM, are my early indicator and test case for how I recover those 175/150s. At this moment I don't think the 175/150s will have meaningful early close opportunity until the share price reaches 250.
I'm trying something with 135/115s and we'll see how it goes. With the slight move down, and wanting an IV crush to be in my favor, I've closed 1 of those 135/15 spreads worth 6.30, and opened 25 180/170 spread expiring this week. The entry is at .40. Sidebar - these are at Tastyworks, so the premium to enter and exit the trade is noticeably lower than at Fidelity ($20 in, $0 out. vs. likely $48.75 round trip at Fidelity).
The net of this is that I am, in effect, rolling 1 of those 135/115s in Jan '25 into a narrower spread expiring this week at a much closer strike, while also adding leverage. So $2000 at risk to $25000; 135 short put into 180 short put. Jan '25 to Mar 3. It's the last change that all the rest is paying for.
I was aiming to have the new position opened for about 2x of the position I was closing, and missed that. I ended up closer to 2/3rds more ($6 close to $10 open). In this instance it should have been 30:1 to get $12, instead of the 25:1 I actually opened.
The plan is that I usually close as early as 1/2 profit, and assume that over time I'll average 67% profit closes. If/when this new position is closed at 2/3rds, then the net will be the profit from the new position fully paying for the close on the old position.
A subtle benefit of fully paying the BTC price on the spread with the new position, is that all of the credits that accumulated on my way to 135/115 in Jan '25 will become the realized gains on the overall position (plus any extra earnings beyond 2/3rds of the current position). The Jan'25 position will still be a net loser, but with the gains on the new position, the overall will be a net gain. Probably a $1/spread of the Jan '25 or something for a 2-3 month trade and end of year angst.
I have a lot more than 1 of these, and I'm actually doing 2 of these for my initial foray. It'll take awhile to clear them all up this way - this trade is more about how I like the dynamics of the trade.
I continue to see $200 as the very low end of a longer term reasonable trading range, so I'm still leery about cc, though I have returned to selling a few of those. In fact I closed some 240cc for this week for a net .30 each.
But the BPS saga.
The bad news - the first were worth $16 when I rolled - they've improved to 11.75. They haven't even touched $10, so they're still a big overall loss. I figured that $200 wouldn't be DITM enough for an early close or much of anything really, and I've been right.
The others are currently 6.30 (I closed some today at that price, so its exactly that
), and have been as bad as about $12. Their price isn't moving very fast as the share price goes up, nor did I expect it to. These spreads, being so much further OTM, are my early indicator and test case for how I recover those 175/150s. At this moment I don't think the 175/150s will have meaningful early close opportunity until the share price reaches 250.I'm trying something with 135/115s and we'll see how it goes. With the slight move down, and wanting an IV crush to be in my favor, I've closed 1 of those 135/15 spreads worth 6.30, and opened 25 180/170 spread expiring this week. The entry is at .40. Sidebar - these are at Tastyworks, so the premium to enter and exit the trade is noticeably lower than at Fidelity ($20 in, $0 out. vs. likely $48.75 round trip at Fidelity).
The net of this is that I am, in effect, rolling 1 of those 135/115s in Jan '25 into a narrower spread expiring this week at a much closer strike, while also adding leverage. So $2000 at risk to $25000; 135 short put into 180 short put. Jan '25 to Mar 3. It's the last change that all the rest is paying for.
I was aiming to have the new position opened for about 2x of the position I was closing, and missed that. I ended up closer to 2/3rds more ($6 close to $10 open). In this instance it should have been 30:1 to get $12, instead of the 25:1 I actually opened.
The plan is that I usually close as early as 1/2 profit, and assume that over time I'll average 67% profit closes. If/when this new position is closed at 2/3rds, then the net will be the profit from the new position fully paying for the close on the old position.
A subtle benefit of fully paying the BTC price on the spread with the new position, is that all of the credits that accumulated on my way to 135/115 in Jan '25 will become the realized gains on the overall position (plus any extra earnings beyond 2/3rds of the current position). The Jan'25 position will still be a net loser, but with the gains on the new position, the overall will be a net gain. Probably a $1/spread of the Jan '25 or something for a 2-3 month trade and end of year angst.
I have a lot more than 1 of these, and I'm actually doing 2 of these for my initial foray. It'll take awhile to clear them all up this way - this trade is more about how I like the dynamics of the trade.
While I'm at it, I also closed some LEAPs. Mostly June '25 200s. This was mostly driven by an external need to raise some cash, but its a discipline and action I wanted to start taking somewhere around here.
These were roughly in at $40 and out at $60, so some of that falling knife I kept catching has paid back a bit, and that account has a bit less leverage now.
SpeedyEddy
Active Member
(Again big SPY bets on -P 395 -C 396 and where are we now, which share is used most to get there?)
Had a day out with my dear spouse, so in advance ordered half of my this weeks -C for a close at 30%gain (on which -C I was doubly over-leveraged, being sure of today’s drop). That filled within 35 minutes. So now I have only exactly covered my shares with -CC for next week and the week after. Next few minutes I will close exactly half of these, not to get caught overnight. At a 30% gain too. And then watch investorday having my finger on the aftermarket sell-button for half of the stock.
Had a day out with my dear spouse, so in advance ordered half of my this weeks -C for a close at 30%gain (on which -C I was doubly over-leveraged, being sure of today’s drop). That filled within 35 minutes. So now I have only exactly covered my shares with -CC for next week and the week after. Next few minutes I will close exactly half of these, not to get caught overnight. At a 30% gain too. And then watch investorday having my finger on the aftermarket sell-button for half of the stock.
Zack opening Invstors Day:
“Not talking about this quarter or next..”
A nice cold splash on the hype.
“Not talking about this quarter or next..”
A nice cold splash on the hype.
I guess it will be way over the head of the markeds, as always.Zack opening Invstors Day:
“Not talking about this quarter or next..”
A nice cold splash on the hype.
unfortunately I have not slept for 36 hours and spent the entire days between airports; too tired to feel it so havent done anything yet.
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Elon at the end: “Oh, and one more thing…no bounce guys, sorry not sorry!”
EVNow
Well-Known Member
Any guesses on Friday close SP? I’ve -195 calls. AH at 196 now.
I’ve to wonder whether somehow it will be back to 200.
I’ve to wonder whether somehow it will be back to 200.
lol looks like you should be OK
That's quite the pull so far. It's only after hours but people are dumping big lots. Let's see what happens in the morning tomorrow.
I sold to open a few $212.5 -C earlier today for next week (channeling you) and left open several 190, 187.50, 185, 175, 170 -P expiring this Friday. Maybe only the 190 will be ITM, but I think we close between 190-198.50. I only have 5x of those so I’m not worried.
Question is what to STO tomorrow based on action. If downtrend confirms (below 189) perhaps more -C 210 for 3/10…
The "market" is hilarious. Tesla is the only company that can make EVs with a healthy profit. They showed why, and are rapidly improving further. Everyone else is toast. They are already at 2 million/year run rate. Megapacks are ramping exponentially, and the stock is down AH >5%. LOL
Terrible presentation. Bears will take over this run. We'll be going down further. Sell calls, don't sell puts.
same here. saved some dry powder, but will be using that to flip some covered calls to ITM puts instead. Banking on max pain to pull the SP back up. If wrong, can always roll it to next week. Although opening a long position could potentially be more profitable, there's the possibility that dl003's TA takes over and takes the stock lower still.
EVNow
Well-Known Member
Who knowslol looks like you should be OK
That's quite the pull so far. It's only after hours but people are dumping big lots. Let's see what happens in the morning tomorrow.
If it closes below 195, I'd have finally "escaped" ER related ITM calls.
what does a good invertor day presentation supposed to have?
For LEAP buyers/sellers, can you take a moment to explain the benefit/process from your perspective? By now I’ve learned quite a bit about buying/selling normal dated options hanging out here and from the pinned FAQ.
I’ve read from so many people in here through the 2nd half of 2022 who got terribly hurt from LEAPS, what went wrong and what’s the right way to go about it?
Thanks in advance.
I’ve read from so many people in here through the 2nd half of 2022 who got terribly hurt from LEAPS, what went wrong and what’s the right way to go about it?
Thanks in advance.
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