EVNow
Well-Known Member
Support at 166.85 and 164.05 .... according to Wicked Stocks.
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Wiki Selling TSLA Options - Be the House
- Thread starter adiggs
- Start date
Impressive! Held 166.57 so far.
Meanwhile my -P160’s for 5/12 are red until we bounce. Practicing responsible patience.
Today was a gift from the TSLA-Oracle/Whisperer @dl003. I used his predicted SP drop to buyback and reorganize. Thanks so much for the predictions. Unfortunately, I had anti-FOMO and started a bit too early, missing out on the last few points.
In any case, was able to close CCs and free up about half my shares. Able to roll -c165s to June -c170s for credit. Almost out of free cash, so will wait on further trading to see if it can be better deployed.
Still holding:
Jan2025 -c210s, Jan2025 -p/-c200s, and June2023 -c170s
5/12 ICs: 155/165/180/190, 150/160/175/185
5/19 ICs: 155/165/180/190
Also, opened wide ICs, just to learn if these are manageable like a cash/share-backed short strangle/straddle. Probably a bit bold, but as @adiggs always said, open a learning position with enough at risk to get your attention, enough to learn, but not so much to lose your account, and then (hopefully) get paid to learn! Fully expect that these will need rolling management, hopefully won’t lose them.
1x 5/12 IC: +p135/-p160/-c175/+c200 at $1.40 (~4.5%)
1x 5/19 IC: +p135/-p160/-c175/+c200 at $4.50 (~25%)
In any case, was able to close CCs and free up about half my shares. Able to roll -c165s to June -c170s for credit. Almost out of free cash, so will wait on further trading to see if it can be better deployed. Still holding:
Jan2025 -c210s, Jan2025 -p/-c200s, and June2023 -c170s
5/12 ICs: 155/165/180/190, 150/160/175/185
5/19 ICs: 155/165/180/190
Also, opened wide ICs, just to learn if these are manageable like a cash/share-backed short strangle/straddle. Probably a bit bold, but as @adiggs always said, open a learning position with enough at risk to get your attention, enough to learn, but not so much to lose your account, and then (hopefully) get paid to learn! Fully expect that these will need rolling management, hopefully won’t lose them.
1x 5/12 IC: +p135/-p160/-c175/+c200 at $1.40 (~4.5%)
1x 5/19 IC: +p135/-p160/-c175/+c200 at $4.50 (~25%)
EVNow
Well-Known Member
Looks like last 10 days TSLA is more or less following Nasdaq.
EVNow
Well-Known Member
I usually don't even look at the current price after selling options. I don't expect that I'd have sold exactly at the best time - I just keep track of SP compared to strike price.
That’s a good tip, thanks. I’m going to try that. I can drive myself nuts watching the gyrations, and is probably how I scare myself out of positions too early.
jeewee3000
Active Member
Closed my 170ccs today. (Expiration 5/12 and 5/19)
Edit: they were not ITM today
Edit: they were not ITM today
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Reasons I’m holding onto my 40x -P160 5/12 avg. $0.68:
1) TSLA held $166 today, despite it being a de-risking day prior to CPI tomorrow morning (for those out there who use news to drive their trading).
2) Weekly expected range is $161.90-$178.30
3) Huge 20k+ OI at -P160 (many ppl making similar bet)
4) Our resident TSLA seer @dl003 indicated that if TSLA sees $170 (which it did) it’ll confirm that the rally we saw has legs and wasn’t a bull trap, and when it retests breakout area around $165-166 (which it did today) to then sell $165 puts aggressively (which he did, and if he did -P165 then -P160 is certainly safe), holding out for at least $180. So it seems the pain is over.
I also learned to keep an eye on the overall share price vs strike price of open contracts and not to obsess over the intra-day gyrations of the contract value whether it’s red or green (thank you @EVNow). Loving the mental relief!
1) TSLA held $166 today, despite it being a de-risking day prior to CPI tomorrow morning (for those out there who use news to drive their trading).
2) Weekly expected range is $161.90-$178.30
3) Huge 20k+ OI at -P160 (many ppl making similar bet)
4) Our resident TSLA seer @dl003 indicated that if TSLA sees $170 (which it did) it’ll confirm that the rally we saw has legs and wasn’t a bull trap, and when it retests breakout area around $165-166 (which it did today) to then sell $165 puts aggressively (which he did, and if he did -P165 then -P160 is certainly safe), holding out for at least $180. So it seems the pain is over.
I also learned to keep an eye on the overall share price vs strike price of open contracts and not to obsess over the intra-day gyrations of the contract value whether it’s red or green (thank you @EVNow). Loving the mental relief!
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BTO +C175 6/9 (31 days) @ $6.27
Trying to branch out to something other than selling puts/selling calls. Plus bought calls can go over 100% (and don’t put shares at risk) whereas sold calls don’t.
If the bull is indeed back for TSLA then it should profit pretty soon and well.
Let’s see!
optionstrat.com
Trying to branch out to something other than selling puts/selling calls. Plus bought calls can go over 100% (and don’t put shares at risk) whereas sold calls don’t.
If the bull is indeed back for TSLA then it should profit pretty soon and well.
Let’s see!
TSLA Jun 9th 175 Long Call (5) | OptionStrat
View my options strategy on OptionStrat
optionstrat.com
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Can you explain the choice of strikes for the IC, I’d like to try one and learn on the job.
It seems when I sold -C185 and -P160 this week I had inadvertently created a “naked” IC, meaning my shares or collateral/margin were at risk if either side went ITM (-C=shares; -P=collateral/margin).
If I understand correctly, a proper IC (like you have) protects shares and margin by buying the strike above the -C and below the -P.
1) What’s the practical difference if the +C and +P is $2-3 above or below or $5-10 (like you have above).
2) Is it true best practices it’s not to let it run to expiration but to close at 30-50% profit?
3) Lastly, do you find any need/benefit to close one leg (+P/-P; +C/-C) at a time surgically or all at once?
Thanks.
Here’s an example:
Is the loss potential shown below real? I thought the +P and +P are supposed to protect/limit loses:
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^^^ This is how I think of it. Max Loss of $59,400 is 75K (150 contracts of 100 * 5) less the credit you receive for opening the position. SP less than 155 or greater than 195, it's the cost to sell shares @ 155 that were put to you @160 or buy back shares @195 that were called away @190, it's the effective margin requirement.
Thanks. So it’s not loss in the real sense (like with normal calls and puts) since it means we own the shares and can sell them to the market? The red looks scary lol.
It's what you'll be out if the SP blows past 195 or falls below 155 and you choose to exercise either long option. If you didn't want to lose shares and SP rockets, you can buy back shares at 195 ... at a cost of 59,400 (75k - 15,600) above what you received when the shares were called away. Similarly, if the SP is below 155 and you want to sell the shares put to you (because you didn't really want them), exercise the option. The loss is the same ... $59,400 more than what you paid for those same shares... these are indeed normal options , very real consequence if you don't want shares put to you or shares called away.
The way to maximize the IC is to build it one side at a time, selling into strength; open the call side when SP is at peak, the put side when at the low, get out of the side that's working against you, ride out the other to expiry or just close out early with a nice credit.
Ugh! So where is the protection? What’s the point then of the +C and +P, perhaps just some tempering of loss?
Sorry - yes. It my shorthand - the short leg is the one that is interesting, so I put that first. If I were selling a call spread, it'd be something like 190/200 (-190c / +200c). You'll never see me sell a call spread however
I have previously taken a crack at Iron Condors and after a few tries I decided that they are emotionally not for me.Today was a gift from the TSLA-Oracle/Whisperer @dl003. I used his predicted SP drop to buyback and reorganize. Thanks so much for the predictions. Unfortunately, I had anti-FOMO and started a bit too early, missing out on the last few points.
Still holding:
Jan2025 -c210s, Jan2025 -p/-c200s, and June2023 -c170s
5/12 ICs: 155/165/180/190, 150/160/175/185
5/19 ICs: 155/165/180/190
Also, opened wide ICs, just to learn if these are manageable like a cash/share-backed short strangle/straddle. Probably a bit bold, but as @adiggs always said, open a learning position with enough at risk to get your attention, enough to learn, but not so much to lose your account, and then (hopefully) get paid to learn! Fully expect that these will need rolling management, hopefully won’t lose them.
1x 5/12 IC: +p135/-p160/-c175/+c200 at $1.40 (~4.5%)
1x 5/19 IC: +p135/-p160/-c175/+c200 at $4.50 (~25%)
The problem I experienced, and it IS my problem, is that I'm comfortable with managing put spreads as there is a limit to just how far down we can go. I'm always think that there is no limit to how far up we can go, so I view the call side of the IC as always ready to go to max loss.
I've never been good at picking a range within which I expect the share price to stay in, or at least finish in. So I'd need to make my IC really wide to feel safe. And then every day where the share price moves more than a $ or 2 I'll be worried about the leg the IC is moving into, and how I'm going to manage it. In the ones that I opened, every day felt like a losing day, even when both legs ultimately close at 2/3rds profit (my assumed / target profit level on trades).
Like I said - a bad emotional fit for me
Perhaps do some of your own research on Iron Condors. It's a complicated topic to explain all the nuiances here and there are a multitude of videos on Youtube that do a better job.
However I'll try to give a very simplified explanation. An IC is essentially a BCS and a BPS combined. They can be opened as a single IC (depending on broker) or combined from BPS and BCS of the same expiry, opened at different times. Only one side can lose at a time and only if the share price ends up outside the range between the short strike legs on the BPS and BCS at expiry. The C+ and P+ provide protection by limiting the total loss. Essentially a P- has a max loss if the share price goes to zero, while a C- has essentially infinite max loss. The C+ and P+ limit the max loss to the spread width to the C- or P-. For example a 145/155 185/195 IC is made up of a BPS with 145P+ and 155P- and a BCS with 185 C- and 195 C+. Because the spread width between the P-/P+ and C-/C+ is $10, the max loss is $10x100=$1000 per contract. For next week's expiry you would get around $0.75 in premium for the BPS and $0.55 for the BCS, making a total premium received for the IC of $130, for which you risk a max loss of $1000 per contract less the premium received.
IC's (and BCS/BPS for that matter) can be very dangerous, even if you know exactly what you're doing. There are a lot of variables at play such as spread widths, distance between BCS and BPS, distance OTM, time to expiry, margin etc that all have a big impact on the risk, return and managability. They can be rolled and adjusted if required but in a much more limited way than a P- or C-. Depending on the spread widths, a profitable IC can become unprofitable on either side very quickly, so it's good practice to close or adjust the winning side early. However, when it goes bad, you often find yourself having to accept the max loss sometimes after digging a deeper hole with debit rolls (been there many times). In the current market environment I don't see IC's providing a great risk return ratio. In better times they were my default strategy but lately I've stayed far away from them.
Whoa, a whole lot to unpack there. First of all, do NOT start out selling 150x of anything. Full stop. Second, spreads (and an IC is just two spreads, bull put and bear call) are absolutely real dollar losses, more so than selling cash-secured puts and covered calls. CSPs and CCs are fully covered (having the SP go ITM just means exchanging shares into cash or vice versa at the agreed strike price). When spreads go ITM at expiration the entire cash backing is lost. Your homework is to read upthread (Fall 2021-December 31, 2022) about the real financial and mortal danger of trading spreads when the SP goes against the position.
Ok, with those warnings, let’s discuss my rationale: Unfortunately, not much, but I like $10 wide spreads for simple, in my head calculations. 1x $10 wide spread is $1000 at risk of being lost if ITM. 100x is thus $100k at risk. Wider spreads have lower %premiums and require more cash backing at risk, while narrower spreads conversely lower dollars at risk but increase %premiums and chance of rapid losses. Narrower spreads can go from bad to worse to complete loss in the blink of a trading day. Spreads can be difficult to roll, or require dumping good money into a bad rolling position, for a worse loss in the future (read the numerous explanations by @adiggs upthread). My minimum spread width is $10, but I’m now trying $15, $20, and $30 just to experience the impacts on risk, premiums and rolling.
I’m not completely satisfied with my position, so don’t think it’s “perfect.” Ideally, I would only open on Wednesday (2 DTE) or preferably Thursday (1 DTE) for the highest theta decay, but unfortunately some of these are rolled from a previous losing position.
Summary: If wanting to trade spreads, be very careful, start with single contracts 1-2 DTE, >10% OTM, and always be prepared for total loss of the spread value. Hope this helps.
Edit: Great explanation by @Chenkers above. Thanks.
Ok, with those warnings, let’s discuss my rationale: Unfortunately, not much, but I like $10 wide spreads for simple, in my head calculations. 1x $10 wide spread is $1000 at risk of being lost if ITM. 100x is thus $100k at risk. Wider spreads have lower %premiums and require more cash backing at risk, while narrower spreads conversely lower dollars at risk but increase %premiums and chance of rapid losses. Narrower spreads can go from bad to worse to complete loss in the blink of a trading day. Spreads can be difficult to roll, or require dumping good money into a bad rolling position, for a worse loss in the future (read the numerous explanations by @adiggs upthread). My minimum spread width is $10, but I’m now trying $15, $20, and $30 just to experience the impacts on risk, premiums and rolling.
Why those strikes? Mostly just guessing that the inner strikes won’t be violated based on open/traded options on MaxPain and my newbie understanding of charting technical analysis. Obviously, the farther away from the SP, the lower the premiums and the less risk. Near ATM, inside of SP+/-10%, is pretty risky. Outside of SP+/-20%, much safer, but lower premiums. The choice is yours.
I’m not completely satisfied with my position, so don’t think it’s “perfect.” Ideally, I would only open on Wednesday (2 DTE) or preferably Thursday (1 DTE) for the highest theta decay, but unfortunately some of these are rolled from a previous losing position.
Finally, a few more points: Read my previous posts up thread for more details, but I’m gravitating toward wider spreads, 1-2 DTE, because the decay and cost of the protective +c and +p are lower. In the 5+ DTE range, the protective (long) options actually decay faster than the money-making (short) options because they are farther OTM. That’s difficult to watch. Furthermore, like adiggs just said, selling call spreads is nerve-racking because the SP can rocket at any time. I probably should not be selling ICs, but instead just stay with BPSs. When the SP goes up, the BPSs are hedging my CCs, while the BCS side of the IC will amplify the loses on the CCs.
Summary: If wanting to trade spreads, be very careful, start with single contracts 1-2 DTE, >10% OTM, and always be prepared for total loss of the spread value. Hope this helps.
Edit: Great explanation by @Chenkers above. Thanks.
Thanks.
Here’s an example:
Is the loss potential shown below real? I thought the +P and +P are supposed to protect/limit loses:
View attachment 936333
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