Thanks for sharing this example. I have 5x 4/6 -c190 that I feel may be okay if we trend down the next few weeks. The 2x 7/21 -c220 , maybe not. I may give this a go using IC in a few weeks when we are priced lower (can't trade strangles with Level 2).
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Wiki Selling TSLA Options - Be the House
- Thread starter adiggs
- Start date
Thanks for sharing this example. I have 5x 4/6 -c190 that I feel may be okay if we trend down the next few weeks. The 2x 7/21 -c220 , maybe not. I may give this a go using IC in a few weeks when we are priced lower (can't trade strangles with Level 2).
NOT-ADVICE
Something I'm doing with these distant options that i want to clean up, besides just buying them out, is to rely on realized gains from new positions rather than the credit created on open.
My thinking is that its pretty easy to open for some credit, but then close early and focus on the gain from the 1 position, and forget that with buying out the first position, I (in effect) paid 1/2 price to close the thing I wanted closed. 1/2 is a good result, but if I'm thinking I just made money, when I actually cut a loss in half, its still a loss that I thought was a gain.
An alternative formulation that keeps the events more closely tied is to open the new position for 2x the cost of the position I'm closing. Then when I close the newly opened position for a 50% gain, I've actually closed that long term position for free.
Hopefully that makes sense. I figure the conservative approach - open a position that I actually want. When that position is closed for some gain, use some or all of that gain to buy out a long dated position that I want gone. The key here, for me, is to avoid entering a position that I don't otherwise want, in the hope that the extra leverage and risk will enable a quick recovery from a bad position.
Though we may have begun a downtrend I don’t think we race down to 170-160 in one shot over the coming week, which implies STO new -P175 for 3/10 on Monday if/as we drift lower might make sense. Likewise STO -C210 or -C215 for the same expiration on any rises.
Anyone seeing same?
Anyone seeing same?
Agreed. No data from me, but my non-analytical observations back up your hypothesis: Friday’s are less volatile and tend towards MaxPain more than any other day. Daily options trading very closely follows (or perhaps sometimes drives) SP, often calls just slightly above SP by one major strike and puts just below. I’ve also observed that early pre-market pricing highly correlates to the daily OI MaxPain. Unfortunately, what happens at/after 9:30 seems to be unpredictable (at least to me because I don’t have real-time or level 2 quotes). Even so, I like to watch daily MaxPain, daily/OI options, as well as the SP, volume, Fibonacci levels, RSI, MACD and historical SP levels to see if the stock is trading “normally” (under MMs control) or whether a run up or down is happening. I rarely predict the SP direction or reversals correctly, so some days I wonder why I bother.
Interesting, I hadn’t thought about making the money first and then closing the position. I may try that but there’s just something immensely satisfying to me about chopping up an OTM option with no time value and then watching the pieces drain theta and expire.
In this case, it’s true that the 200/202.50 I’m looking at are closer to the money than I’d be opening just to make income, but I don’t mind being pushed to be a little more aggressive with just a couple contracts - I think they can be probably be managed even if we do get a big swing up or down.
Also another good point about losing sight of the original loss when splitting one into multiple contracts. Even if closing the new ones at 80+%, that amount multiplied by all the new contracts is probably more than I’d be willing to have closed the old single old contract for.
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I don't see any downtrend myself, seems to me the end of the week put the S&P + QQQ back into an uptrend, no?
Obviously I have no idea where TSLA is heading, but my instinct says nowhere much until CPI print, which I expect to be stone cold and spark a severe short-squeeze across many stocks
Not advice, just the way I'm reading it, might turn out to be the opposite, who knows
On the fact that inflation took off after Putin invaded Ukraine Feb 24th last year, so up until now the yoy comparison has been against the lower prices pre-war, now they'll be compared to the higher post-war-start, so a double-whammy as prices which have been dropping for months will now be compared to prices that spiked massively a year ago... March numbers will be even better
Watch this, explains it all:
You’re right that nobody really knows. I’m basing on TSLA negative divergence on the RSI the last couple weeks + slowing momentum/volume, plus:
- Dec/Nov CPI revised higher
- Jan CPI/PPI above expectations
- PCE inflation rising again
Three weeks ago Powell said he would “certainly” raise rates more if data came in stronger.
We also have that gap at the 140’s…
Thanks for video. The part you tagged talked about the stubborn shelter component of inflation. But this is a mostly US problem that does not have to do with the Ukraine, correct? I don’t know what is going in Europe with rents. I do know that we had some ‘record‘ eurozone inflation readings last week.
That is all stuff that has been out there for a few months, but I feel like it is not so simple right now. There are things brewing post COVID that no one seems to have a handle on regarding inflation. What I see anecdotally is an absolute denial of most people across the board to curtail their spending regardless of their finances. That and the airline ticket prices for the European summer family vacation we want to book have EXPLODED. Flights that we booked four years ago for five people for ten thousand have been quoted to us for a minimum of 20K. We refused to book and waited a day and then the same package was quoted at 40K! I s&*$ you not.
EVNow
Well-Known Member
Market actually seems to care more about month-over-month numbers for this reason.
Currently the main issue is service inflation ... and unless the unemployment goes up, the labor market will be continue to be tight. BTW, here is an anecdote. We used to pay around $20 an hour for nannies before Covid. Towards end of '21 we had to pay about $25/hr. Now we are being quoted $35/hr (they are not even asking what we want to pay - they are just stating their rates !).
This is exactly right. I see salaries popping at huge percentages. And people seem to have the ability to just shrug and not work at all if they don’t get what they want. I am guessing this is temporary, but I don’t know when the reset ends.
Just like the 15 dollar minimum wage wage floated and then executed in many metro areas a few years ago, I hear calls now for 25 an hour.
EVNow
Well-Known Member
With such tight labor market - obviously they are getting jobs that pay the rate they want. Pre-Covid when we advertised for a nanny, we'd get a dozen applications within a day. This time after 2 weeks, we have got like 4 applications ....
There is this weird idea being floated around that people "don't want to work". Currently since the labor market is tight, workers are able to pick and choose where they want to work and what jobs. Workers can be a lot more selective and demand better wages and conditions.
In our situation - for eg. - the tight "nanny market" will end, when a lot of tech workers (who hire nannies in my area) get laid off ... and they no longer need to hire nannies. Or nannies from other areas migrate to my area (in the long term).
Hmmmmmm. That’s a little over one TSLA share per day. Are you still looking? Paying cash? I could be over today.
Posted TA graph here. As for the next two weeks options front, MaxPain says flattish at $195+/-$5 for 3/10 and then perhaps dropping down, maybe even into the $180s for 3/17. Open interest shows a dividing line right below $200, so maybe just right at the current SP. However, somebody took a pretty big 3/17 p180 bet yesterday, so maybe that’s where we go. Only time will tell. I’m fairly well hedged, with BPS and CCs, but was hoping for a Monday spike to sell some BCS to form the ICs. So, for that reason alone, expect a drop on Monday.
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This is an odd one for me to ponder - the 03/17 expiration is a quarterly - meaning weekly, monthly and quarterly expiration or a "triple witching"
Which is only eclipsed by a yearly quad in January and June.
But this chart seems so spread out and already hedged that I am not confident in where it will end up.
Normally for a triple witching you see lots of walls that were set when the underlying was different.
So kinda weird. I'm going to think about this one for a bit - If I come up with anything I will share of course.
I'm starting this week naked - no open positions (aside from shares and leaps) so I'm looking for a big up or down to open something up for Friday expiration today.
Crazy how hard they push TSLA down now at the open, even with strong Macros. I might need to consider selling shares in pre-market and buying them back after the open.
Seems to be a daily thing, usually starts in pre-market around 20-25 minutes before open
EVNow
Well-Known Member
Probably because of S &X price cuts.
I don't know. That was known in pre-market, they are low volume cars, and they are still priced higher than a couple years ago = massive profits even at the lower price.
Opened Strangle - STO $190P / $200C - $8 each - Let's goooo Theta!
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