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Wiki Selling TSLA Options - Be the House
- Thread starter adiggs
- Start date
TheTalkingMule
Distributed Energy Enthusiast
I haven't figured out spreads yet... but just looking at a 1,000 strike price in '23 and it's still only $10K. If that hits = $40K (I think).
So there's a column that says "Change". Is that today, and how much the ask as dropped since the close yesterday? Deep in the money gets hurt more on days like these it seems.
I give it a 50% chance of reaching $1,000 just this year despite macro crap. Cashflow rules, Factories be hummin!
I'm getting the itch down here. (See my note in the other thread.)
Just one to stick a toe in. I think $900 in '23 supports my $901 theory by end of year well.
Loaded up some 06/18 $720 strike calls BTO for $1.50 each today.
Looking to capture momentum for event next week - GTC sell order in for $5 each.
IV is 50.... crazy low to be selling options, so I buy!
Looking to capture momentum for event next week - GTC sell order in for $5 each.
IV is 50.... crazy low to be selling options, so I buy!
Couple of things from me today.
On the trading side, I had some 600 puts and some 610 calls for this Friday. With the shares in the low 600s I rolled both out 1 week to June 11 for a minimal credit and a $20 strike improvement. I've traded in a June 4 600/610 strangle for a June 11 580/630 strangle. Or as I like to think of it, I am delaying the profits from those June 4 positions by 1 week and picking up roughly a $1 net credit to do so.
This is part of one of my new rules - when a position is slightly ITM (or I'm worried that it's going ITM as I watch) then I add 1 week to expiration and as much strike improvement as I can get. I don't need any particular week to be hugely profitable (that's MY context) but I do need a pretty steady drip-drip-drip of dividends like income.
The aggressive rolling approach is also intended to get me to the very best strike possible in a rapidly moving share price environment. If the shares were to keep going down, to say 500 in 2 weeks, then the early put roll to 580 and a followup roll(s) might get me to a 540ish strike when I finally "lose contact" and start rolling for time.
Or put another way - besides delaying profit by a week, I am also taking (some) risk out of the position; for me that is well worth a 1 week delay in earning the profit.
(2)
The other idea that has finally occurred to me today and that I am planning to implement (I am eager to hear about the downsides of this plan - I haven't found them beyond what I list).
I have some -760p and -400c for June 11 that I am growing weary of. It occurred to me this morning that I can allow these to go to expiration next week and the net result will be no change in shares and no (further) change in cash (plus or minus).
The math:
Shares at $605 right now; the 760p is $155. Very little time value remaining, so option price is pretty much $ for $ intrinsic value.
Meanwhile the 400c option price is $206. Still $1 in time value.
The premiums received to get into these positions are $141 (put) and $219 (call) - slightly rounded but only be $0.23.
On June 11 next week these will be priced at 760-share price and 400+share price. Let's say it's $625 for ease of calculation, though the end result is the same where we land as long as we're still between 400 and 760.
At $625 per share I will be selling 100 shares at $400 plus the $219 premium received or $619 per share. I will also be buying 100 shares at 760-141 or $619 per share. My buy and sell prices are set by the cost basis for my entry point and that entry point is pretty much exactly $360 between the two (it's actually $359.77 - there will be a small bit of slippage). The actual share price doesn't matter as long as its between 400 and 760 and is also so far ITM that there is effectively no time value.
The 100 shares purchased are offset by the 100 shares being sold. The cash for selling (including the premium received) is offset by the cash for buying (including the premium received).
This isn't a free escape from a lousy situation. The losses incurred have really all been paid for - I just keep opening a bigger and bigger offsetting position. Actually its been growing and shrinking with changes in the share price, pretty much $ for $ for a month or more now.
What this DOES get me is the end to managing these far, far ITM positions.
Which provides me a pointer for how to resolve the remaining 760 puts. Swap half of them over into calls (net flip roll premium ~0) and then allow the calls and puts go to expiration. No decrease in cash on assignment and also no increase in shares. I'm still paying for them, and I can create the same outcome by taking assignment and then immediately selling / buying shares to achieve no change. The difference is that this way I'm not risking weekend slippage - having the shares move the wrong way and then adding onto the already accumulated loss (I also lose exposure to beneficial slippage where the shares move in my direction).
My plan of the moment is to roll enough of the remaining 760 puts so that they also net out on June 11 and I'm done with this position.
On the trading side, I had some 600 puts and some 610 calls for this Friday. With the shares in the low 600s I rolled both out 1 week to June 11 for a minimal credit and a $20 strike improvement. I've traded in a June 4 600/610 strangle for a June 11 580/630 strangle. Or as I like to think of it, I am delaying the profits from those June 4 positions by 1 week and picking up roughly a $1 net credit to do so.
This is part of one of my new rules - when a position is slightly ITM (or I'm worried that it's going ITM as I watch) then I add 1 week to expiration and as much strike improvement as I can get. I don't need any particular week to be hugely profitable (that's MY context) but I do need a pretty steady drip-drip-drip of dividends like income.
The aggressive rolling approach is also intended to get me to the very best strike possible in a rapidly moving share price environment. If the shares were to keep going down, to say 500 in 2 weeks, then the early put roll to 580 and a followup roll(s) might get me to a 540ish strike when I finally "lose contact" and start rolling for time.
Or put another way - besides delaying profit by a week, I am also taking (some) risk out of the position; for me that is well worth a 1 week delay in earning the profit.
(2)
The other idea that has finally occurred to me today and that I am planning to implement (I am eager to hear about the downsides of this plan - I haven't found them beyond what I list).
I have some -760p and -400c for June 11 that I am growing weary of. It occurred to me this morning that I can allow these to go to expiration next week and the net result will be no change in shares and no (further) change in cash (plus or minus).
The math:
Shares at $605 right now; the 760p is $155. Very little time value remaining, so option price is pretty much $ for $ intrinsic value.
Meanwhile the 400c option price is $206. Still $1 in time value.
The premiums received to get into these positions are $141 (put) and $219 (call) - slightly rounded but only be $0.23.
On June 11 next week these will be priced at 760-share price and 400+share price. Let's say it's $625 for ease of calculation, though the end result is the same where we land as long as we're still between 400 and 760.
At $625 per share I will be selling 100 shares at $400 plus the $219 premium received or $619 per share. I will also be buying 100 shares at 760-141 or $619 per share. My buy and sell prices are set by the cost basis for my entry point and that entry point is pretty much exactly $360 between the two (it's actually $359.77 - there will be a small bit of slippage). The actual share price doesn't matter as long as its between 400 and 760 and is also so far ITM that there is effectively no time value.
The 100 shares purchased are offset by the 100 shares being sold. The cash for selling (including the premium received) is offset by the cash for buying (including the premium received).
This isn't a free escape from a lousy situation. The losses incurred have really all been paid for - I just keep opening a bigger and bigger offsetting position. Actually its been growing and shrinking with changes in the share price, pretty much $ for $ for a month or more now.
What this DOES get me is the end to managing these far, far ITM positions.
Which provides me a pointer for how to resolve the remaining 760 puts. Swap half of them over into calls (net flip roll premium ~0) and then allow the calls and puts go to expiration. No decrease in cash on assignment and also no increase in shares. I'm still paying for them, and I can create the same outcome by taking assignment and then immediately selling / buying shares to achieve no change. The difference is that this way I'm not risking weekend slippage - having the shares move the wrong way and then adding onto the already accumulated loss (I also lose exposure to beneficial slippage where the shares move in my direction).
My plan of the moment is to roll enough of the remaining 760 puts so that they also net out on June 11 and I'm done with this position.
corduroy
Active Member
I bought some puts today, just for fun. What goes up (that fast) must come down, I figure.Is there a way to play AMC? IV is at 400. I was thinking about some call credit spreads but the strikes only go up to $73.
BIG addendum.
I realize that I've made an important error in my math. It's true that the overall result is no reduction in shares. It is also true that there is no change in cash OVERALL.
However the $36k for the 2 option premiums was previously received. When I let these two go to expiration then I'll be giving it back (paying out) $36k for the two positions to close. That $36k will be the loss from selling shares at $400 and buying them back at $760.
So uhm .. oops.
I could just buy out the 2 options for $36k - same end result. Ah well.
Is there a way to play AMC? IV is at 400
I'm thinking about selling a long-dated call since IV is high and company is highly valued. Have to study my risk management more though.
OK, didn't check-in this week, due to heavy work commitments...
Monday I missed the pop at open, just, as I was in a meeting. I'd pre-decided to target selling calls at $652.50 strike, but didn't have a feel for the premium, so couldn't put in a pre-order. In the event I dd sell 20x, but for a measly $2, plus 15x lcc662.50's for $1 - $5500 in a week like this is OK though...
Interestingly, the lcc662.50's are "underwritten" by June 22 $700's - I didn't realise I could sell lower strikes against these, seems crazy - seems to me that I could buy 1000x cc1400 for next week @ $0.01 and then sell 100x lcc1000 @ $0.05 for $4000 in the pocket - the only risk being the SP shooting above $1k in the next 7 trading days, hmmm...
Like @adiggs I have some puts to treat for this week, 12x ccp62 & 12x ccp610 - I was monitoring these yesterday trying to decide whether, when to roll and to what strike. I observed a +$10 premium for a roll to the same strike, whereas intrinsic it should have been closer to $12, so I decided to wait-and-see, won't change much, plus this drop we've seen is totally manufactured, could reverse by close Friday
Monday I missed the pop at open, just, as I was in a meeting. I'd pre-decided to target selling calls at $652.50 strike, but didn't have a feel for the premium, so couldn't put in a pre-order. In the event I dd sell 20x, but for a measly $2, plus 15x lcc662.50's for $1 - $5500 in a week like this is OK though...
Interestingly, the lcc662.50's are "underwritten" by June 22 $700's - I didn't realise I could sell lower strikes against these, seems crazy - seems to me that I could buy 1000x cc1400 for next week @ $0.01 and then sell 100x lcc1000 @ $0.05 for $4000 in the pocket - the only risk being the SP shooting above $1k in the next 7 trading days, hmmm...
Like @adiggs I have some puts to treat for this week, 12x ccp62 & 12x ccp610 - I was monitoring these yesterday trying to decide whether, when to roll and to what strike. I observed a +$10 premium for a roll to the same strike, whereas intrinsic it should have been closer to $12, so I decided to wait-and-see, won't change much, plus this drop we've seen is totally manufactured, could reverse by close Friday
My +p580/-p590/-c650/+c660 Iron Condor is in danger of going ITM (premarket 589), is not in danger, is in danger, is not in danger, ... Of course, this is all my fault: 550-650 was the original range before i got greedy.
If clearly up by tomorrow (after MMD), the strategy this week is to double the opened IC contracts and move the winning side closer to SP. The 2nd batch will have lower prems and that's ok.
I'm in the process of investigating other kinds of IC - all puts, all calls, etc - to see what works best for me in the current SP movement. Stay tuned!
If clearly up by tomorrow (after MMD), the strategy this week is to double the opened IC contracts and move the winning side closer to SP. The 2nd batch will have lower prems and that's ok.
I'm in the process of investigating other kinds of IC - all puts, all calls, etc - to see what works best for me in the current SP movement. Stay tuned!
bballshinobi
Member
You are definitely gonna get assigned tomorrow lolI sold a June 4th $140 naked call.
I sold 45x $642.50s this morning for $.53. I figured I'd at least try and get some premiums this week. I'll probably look to close them out today prior to close and decide whether or not to re-sell tomorrow if we can finally get a pop. Current premiums are so low I'm not willing to chase to a super-low strike (yet).
I have a -p605 expiring tomorrow, sold on margin.. thinking whether I should roll today at market close, or wait til tomorrow. Don't really want assignment, but getting assigned won't be end of the world either.
This dip feels artificial and bs about order numbers in china.
Is there a way to quantify the risk of early assignment?
This dip feels artificial and bs about order numbers in china.
Is there a way to quantify the risk of early assignment?
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